A UK bureau can run the calculation, produce the payslips and file to HMRC on your behalf. What it cannot do is become the employer, and two duties in particular stay where they started however the contract is worded. Knowing which half moves is the whole of the decision.
What a UK bureau actually takes over
The recurring work: gross to net for each employee, the employer National Insurance calculation, payslips, the Full Payment Submission to HMRC for each pay run and the Employer Payment Summary where one is due. A full managed service will also handle starters and leavers, statutory pay and the year end. That is a real amount of work and it is the part worth buying.
The HMRC relationship does not move
GOV.UK sets out a timetable the bureau has to hit rather than one it owns: an FPS for each pay run, an EPS to claim a reduction on what is owed, and payment to HMRC by the due date in the following tax month. If a submission is late or missing, HMRC issues a late filing notice and can charge a penalty, and late or incorrect reports can affect an employee's income-related benefits. The scheme is yours, so the notice arrives with you.
Auto-enrolment stays an employer duty
Assessing staff each pay period, putting anyone newly eligible into a scheme and writing to them is the employer's duty under the workplace pension rules, and a bureau doing the arithmetic does not take that on. Ask explicitly which of the assessment, the enrolment and the communication the provider performs, and get the answer in the contract rather than in the sales call.
How to test a provider before you sign
Give the shortlist a parallel run of one real pay period against your own figures and compare to the penny. Then ask three questions: who submits the FPS and under whose credentials, what happens the month their contact is on leave, and what the exit looks like in data rather than in notice periods. A provider that answers all three plainly is usually the right one.
When bringing it back in house wins
Two things usually pull payroll back: the volume of queries a third party cannot answer because it does not know the people, and a pay structure with enough exceptions that explaining them each month costs more than running them. Neither shows up in a first-year comparison, which is why the decision is worth revisiting rather than settling once.
Questions people ask about outsource payroll uk
Who is liable if an outsourced UK payroll is filed late?
The employer. The PAYE scheme is yours, so HMRC's late filing notice and any penalty come to you and you recover from the provider under the contract, if the contract lets you. That asymmetry is the reason to read the liability clause rather than the service levels.
Can we outsource part of the payroll?
Commonly, yes. A frequent split is the bureau running the calculation and the filing while the employer keeps the data entry, the approval of the net run and the pension assessment. It costs less than a full managed service and keeps the parts that need knowledge of your people in house.
Does a bureau need access to our HMRC account?
It will either file as your agent or file using your credentials, and the two are not the same for audit. Establish which before go live, and make sure you keep your own access to the PAYE account either way.
What should a UK payroll outsourcing contract include?
The filing responsibility in writing, the correction process and who pays for a penalty, the data the provider returns at exit and in what format, a named contact with cover, and the deadline for your input each period. The last one prevents most disputes.
Is outsourcing cheaper than running payroll software?
It depends on headcount and on how unusual your pay is. Software plus a competent person is normally cheaper per payslip at scale; a bureau is cheaper when the alternative is hiring for a job that is a few days a month. Price both against the same real pay period rather than against a list price.