Managing payroll correctly is one of the most significant and most heavily operated functions of any London business. Whether you hire two people or two hundred, you need to legally calculate pay correctly and deduct the right amount of Income Tax and National Insurance along with reporting to HMRC in real time and fulfil auto enrolment pension duties. Get it wrong and the result varies from unhappy staff to HMRC penalties and Pensions Regulator fines.
At Lexarox Accounts, we understand payroll is one of those operations that look simple from the outside and becomes difficult the moment you look carefully. Every pay run implies calculating the correct pay and deducting the right Income Tax and National Insurance followed by reporting to HMRC in real time and managing workplace pensions in time.
For a lot of London businesses, specifically small and medium sized enterprises, handling payroll in house has become increasingly difficult. Rules change every tax year. The National Minimum Wage rates increase each April and the administrative burden of Real Time Information reporting and pension contributions can easily overburden an internal team that has other important work to complete. This is the reason a lot of businesses across London select outsourcing payroll to a specialist provider such as Lexarox Accounts.
That is where we come in. Our certified team involves payroll-certified professionals who handle the overall process for London businesses from sole traders taking on their first employee to growing limited companies with teams across multiple sites. We combine cloud-based payroll software with hands-on, personal support, so you always have a real person to speak to, not just a portal to log into.
What Are Payroll Services?
Payroll services cover the end-to-end process of paying employees correctly and legally. A payroll provider takes on some or all of the following:
- Calculating gross-to-net pay, including overtime, bonuses, commission and statutory payments
- Deducting Income Tax and National Insurance Contributions (NICs) under PAYE
- Submitting Full Payment Submissions (FPS) and Employer Payment Summaries (EPS) to HMRC through Real Time Information
- Administering workplace pension auto-enrolment, including assessment, enrolment, contributions and re-enrolment
- Producing and distributing payslips, P60s and P45s
- Calculating and processing statutory payments, such as Statutory Sick Pay, Statutory Maternity, Paternity and Parental Bereavement Pay
- Handling starters, leavers, salary changes and student loan deductions
- Preparing P11D forms for benefits in kind and advising on Class 1A National Insurance
Many providers also offer strategic advice, such as helping a company director choose the most tax-efficient salary, or advising on Employment Allowance eligibility.
Why London Businesses Outsource Payroll?
Complexity and constant change
UK payroll rules change every April, and sometimes more often. For the 2026/27 tax year alone, businesses have had to absorb a National Living Wage increase to £12.71 an hour for workers aged 21 and over from 1 April 2026, an employer National Insurance secondary threshold that remains frozen at £5,000, and unchanged auto-enrolment thresholds. Keeping track of these changes, and applying them correctly from the right effective date, is a specialist task in itself.
Cost and time savings
Recruiting, training and retaining an in-house payroll specialist is expensive, particularly in London where salaries for skilled payroll staff are high. Outsourcing converts this into a predictable monthly fee, freeing up internal time for core business activities.
Reduced risk of penalties
Late or incorrect RTI submissions, missed auto-enrolment duties, and National Minimum Wage underpayments all carry financial penalties. A specialist provider builds compliance into every pay run, reducing the risk of costly mistakes.
Access to expertise
A good payroll provider understands director’s National Insurance rules, benefit-in-kind reporting, salary sacrifice arrangements, and the interaction between salary and dividends for owner-managed companies, expertise that is hard to maintain in-house unless payroll is a full-time role.
Confidentiality
Payroll data is sensitive. Outsourcing to a professional provider, bound by data protection obligations, can offer more robust confidentiality than payroll handled by internal colleagues who also work alongside the staff whose pay they process.
Key 2026/27 Payroll Figures Every London Employer Should Know
| Item | 2026/27 Figure | Notes |
| National Living Wage (21+) | £12.71 per hour | Effective from 1 April 2026, not 6 April |
| NMW 18-20 year olds | £10.85 per hour | Effective from 1 April 2026 |
| NMW under-18s / apprentice rate | £8.00 per hour | Effective from 1 April 2026 |
| Employer NI Secondary Threshold | £5,000 per year | Employer NICs apply above this level |
| Employer NI rate | 15% | Unchanged from 2025/26 |
| Employment Allowance | Up to £10,500 | Offsets employer NI for eligible employers |
| Auto-enrolment earnings trigger | £10,000 per year | Unchanged from 2025/26 |
| Auto-enrolment qualifying earnings band | £6,240 to £50,270 | Used to calculate minimum pension contributions |
| Standard Personal Allowance | £12,570 | Frozen until at least 2028 |
These figures apply UK-wide, but London businesses face an additional local benchmark: the voluntary London Living Wage, set independently by the Living Wage Foundation. From April 2026 this stands at £14.80 per hour, well above the statutory National Living Wage. While not a legal requirement, many London employers choose to pay it to support recruitment and retention in a competitive labour market.
Our Payroll Services in London
Whether you need us to run everything or simply want a second pair of expert eyes on your existing process, our payroll service is built around your business. It typically includes:
- Calculating gross-to-net pay, including overtime, bonuses and commission
- Deducting Income Tax and National Insurance Contributions (NICs) under PAYE
- Submitting Full Payment Submissions (FPS) and Employer Payment Summaries (EPS) to HMRC through Real Time Information
- Managing workplace pension auto-enrolment, including assessment, enrolment, contributions and re-enrolment
- Producing and distributing payslips, P60s and P45s
- Calculating statutory payments, including Statutory Sick Pay, Maternity, Paternity and Parental Bereavement Pay
- Handling starters, leavers, salary changes and student loan deductions
- Preparing P11D forms for benefits in kind and advising on Class 1A National Insurance
- Advising directors on the most tax-efficient salary, alongside our wider accounting and tax planning services
Because payroll sits alongside our accounting, tax and self-assessment services, we can look at the full picture, not just your monthly pay run, and make sure your salary strategy, expenses and annual accounts all work together efficiently.
Why London Businesses Choose Lexarox for Payroll Services?
One team, every service
Many of our clients come to us for annual accounts or self-assessment and stay with us for payroll too, because it means one trusted team handling your finances rather than juggling several providers who don’t talk to each other.
We stay ahead of the changes
Payroll rules move every April, and sometimes more often. For the 2026/27 tax year, we have already helped clients adjust to the National Living Wage rising to £12.71 an hour for workers aged 21 and over from 1 April 2026, the employer National Insurance secondary threshold remaining frozen at £5,000, and unchanged auto-enrolment thresholds. We track every change so you never have to.
A friendly, multilingual team
Our team speaks English, Romanian, Spanish, Italian and Russian, so however your business communicates, we can meet you there. You’ll always have a named, experienced contact rather than a call centre.
Fully compliant, fully accredited
We are HMRC-authorised agents, AAT and GDPR compliant, and supervised for anti-money laundering purposes. Your payroll data and your employees’ payroll data are handled to the same professional standard as the rest of our accounting work.
Competitive, transparent pricing
Our streamlined, cloud-based processes let us offer exceptional service at affordable rates, with clear pricing agreed upfront, so there are no surprises on your invoice.
The Payroll Process, Step by Step
A typical monthly payroll cycle managed by a London payroll provider follows a consistent pattern. New starters and leavers, along with any changes to salary, hours or benefits, are submitted to the provider ahead of an agreed cut-off date. The provider then calculates gross pay, applies the correct tax code, deducts Income Tax and employee NICs, calculates employer NICs and pension contributions, and produces payslips for approval.
Once approved, the provider submits the Full Payment Submission to HMRC on or before payday, arranges payment instructions (either directly or via your bank), and issues payslips to employees. At the end of each tax year, the provider issues P60s to all employees and, where relevant, prepares P11D forms for benefits in kind, due to HMRC by 6 July following the tax year.
Let’s Talk About Your Payroll
If payroll is taking up more time than it should, or you simply want the peace of mind of knowing it’s being handled by qualified, HMRC-authorised professionals, we would love to hear from you. Whether you’re a limited company, sole trader, or contractor, our team at Lexarox Accounts can build a payroll service around your needs.
Call us on 0208 533 1358, email info@lexaroxaccounts.co.uk, or book a consultation through our website. Let’s start your journey to financial clarity and success today.
Frequently Asked Questions
1. What does your payroll service include?
Our payroll service covers gross-to-net calculations, PAYE deductions, HMRC RTI submissions, workplace pension administration, payslips, P60s, P45s, statutory payments and P11D preparation. We tailor the exact scope to your business, from a single-director company to a growing team.
2. How much do your payroll services cost?
Our pricing is competitive and transparent, based on your headcount and pay frequency, with no hidden extras. Get in touch for a tailored quote, we’re always happy to talk through what’s included before you commit.
3. Can you help sole traders and single-director companies, not just larger employers?
Yes. We work with limited companies, sole traders and contractors of all sizes, including single-director companies that need a simple, compliant monthly payroll run alongside broader accounting support.
4. How often should I run payroll?
Most employees are paid monthly, though weekly or four-weekly runs are common in construction, hospitality and retail. We’ll help you choose a frequency that suits your business and ensure RTI submissions reach HMRC on or before each payday.
5. Do you handle workplace pension auto-enrolment?
Yes, in full. We assess your staff, manage enrolment and opt-outs, calculate contributions against the qualifying earnings band, and handle the three-yearly re-enrolment cycle, keeping you compliant with The Pensions Regulator.
6. Can you advise on the most tax-efficient director’s salary?
Absolutely. As part of our combined accounting and payroll service, we regularly advise company directors on salary levels that make the best use of National Insurance thresholds, the Personal Allowance and Employment Allowance, alongside dividend planning.
7. What happens if my previous payroll was set up incorrectly?
We regularly take over payroll from other providers or from businesses previously managing it in-house. As part of onboarding, we review your existing setup, correct any errors where possible, and make sure your records are accurate going forward.
