HRMS and Payroll London — UK PAYE Compliant Payroll for Indian Businesses 2026 | MICS Blog

HRMS and Payroll London — UK PAYE Compliant Payroll for Indian Businesses 2026

Indian businesses with UK operations — whether in London's Tech City (Shoreditch), Canary Wharf's financial district, or across Great Britain — must comply with HMRC's PAYE (Pay As You Earn) system, National Insurance Contributions (NIC), Auto-Enrolment pension rules, and UK employment law. MICS provides unified HRMS managing UK payroll compliance alongside India's EPFO, ESIC, and labour law requirements.

UK Payroll and PAYE Compliance

PAYE (Pay As You Earn)

PAYE is HMRC's income tax withholding system:

Tax codes: employee tax code (e.g., 1257L) determines personal allowance
Income tax bands (2025–26): 20% basic rate (£12,571–£50,270), 40% higher rate (£50,271–£125,140), 45% additional rate above £125,140
Personal allowance: £12,570 — tax-free income per year
PAYE submission: Full Payment Submission (FPS) filed with HMRC each pay run
Employer Payment Summary (EPS): monthly where no payments made or NIC holidays apply

National Insurance Contributions (NIC)

Employee NIC (Class 1): 8% on earnings between £12,570–£50,270; 2% above £50,270
Employer NIC (Class 1): 13.8% on earnings above £9,100 (secondary threshold)
Employer NIC relief: Employment Allowance up to £5,000/year — reduces employer NIC bill
Construction Industry Scheme (CIS): if MICS clients in construction, CIS deductions apply

Auto-Enrolment Pension (The Pensions Regulator)

Qualifying employees: all workers aged 22–66 earning above £10,000/year must be auto-enrolled
Contribution: minimum 5% employee + 3% employer (8% total) of qualifying earnings
Qualifying earnings: £6,240–£50,270 band (2025–26)
Pension provider: NEST, Peoples Pension, Aviva — employer must choose qualifying provider
Opt-out: employees may opt out within 1 month, but must be re-enrolled every 3 years
MICS HRMS generates pension contribution files for direct upload to NEST/Peoples Pension portal

UK Employment Law Compliance

National Living Wage (NLW): £11.44/hour for workers aged 21+ (April 2024)
National Minimum Wage: £8.60 for 18–20 year olds
Annual leave: 28 days minimum (5.6 weeks) including public holidays
Sick pay: Statutory Sick Pay (SSP) £116.75/week (2024–25) from day 4
Maternity pay: Statutory Maternity Pay (SMP) 90% for 6 weeks, then £184.03/week for 33 weeks
Paternity pay: Statutory Paternity Pay (SPP) £184.03/week for 2 weeks
P60 and P11D: annual tax documents for employees — HMRC mandated

IR35 (Off-Payroll Working)

Indian IT companies contracting to UK clients often have IR35 implications:

Inside IR35: contractor deemed employee for tax — UK client deducts PAYE
Outside IR35: genuine business-to-business — Indian company invoices UK client
MICS advises on IR35 status determination and compliance

MICS HRMS for London

Employee database: NIN (National Insurance Number), right-to-work status, visa
PAYE: automated income tax and NIC calculation per employee
Auto-Enrolment: eligibility assessment, contribution calculation, pension file generation
Payslip: HMRC-compliant digital payslip with tax and NIC breakdown
FPS submission: Real Time Information (RTI) Full Payment Submission to HMRC
P60/P11D: annual employee tax documents
Holiday tracking: 28-day minimum statutory leave management
Pricing: £400–1,500/month (Rs. 43,000–1,63,000)

India Parent Entity HRMS

EPFO: India head office provident fund compliance
ESIC: India staff health insurance
TDS: India salary income tax deduction
FEMA ODI: Overseas Direct Investment compliance for UK investment
APR: Annual Performance Report for UK subsidiary
Pricing: Rs. 4,000–12,000/month

Combined India + UK HRMS

Unified platform: GBP payroll (UK) + INR payroll (India) in one system
Group headcount and cost reporting
Intercompany secondment: UK-to-India or India-to-UK staff cost recharge tracking
Pricing: £500–2,000/month (combined both entities)

Free London HRMS demo: +91 9355273535 | admin@mics.asia