You can switch payroll provider at any point in the tax year without disrupting your business or your staff. Your PAYE scheme, your HMRC references and your employees all stay the same; only the firm running the payroll changes. The key is to hand over accurate records and year-to-date figures, time the move around a pay date, and tell your pension provider.
This guide covers when to switch, what to collect from your current provider, how a mid-year change works, and a step-by-step plan.
When should you change payroll provider?
Most businesses move because of repeated errors, slow responses, rising fees or a provider that cannot cope with something new, such as a second pay frequency. If you spend time checking and correcting your provider’s work, the service is not doing its job.
The start of a tax year on 6 April is the tidiest point to change, because the new provider starts with a clean year. But you do not need to wait. A mid-year switch works well as long as the handover happens cleanly between two pay runs.
What to gather from your current provider
Ask your current provider for the following as soon as you decide to move. You need these records anyway: employers must keep payroll records for 3 years from the end of the tax year they relate to.
- HMRC references: your employer PAYE reference and Accounts Office reference.
- Employee records: names, addresses, dates of birth, National Insurance numbers, start dates, tax codes, pay rates and each employee’s payroll ID.
- Year-to-date figures: for every employee, the current tax year’s gross pay, taxable pay, tax, employee and employer National Insurance, student loan deductions, statutory payments and pension contributions.
- Pension details: the scheme and provider, contribution rates, your duties start date, your re-enrolment date, and a record of any opt-outs or postponements.
- Last FPS and EPS: copies of the most recent Full Payment Submission and Employer Payment Summary, with confirmation that HMRC accepted them.
- Anything ongoing: court orders, salary sacrifice arrangements, statutory payments in progress, and leavers earlier in the tax year.
Changing payroll provider mid-year
When only the provider changes, you are still the same employer running the same PAYE scheme. Your employees are not leaving, so you do not issue P45s. A P45 is for an employee who leaves your employment, not for a change of payroll software or bureau.
Instead, the new provider loads each employee’s year-to-date figures and carries on, so these figures must match what your old provider last reported. Even where payroll IDs change, HMRC’s guidance says the year-to-date data should cumulate from that on the previous submission.
Payroll IDs need particular care. Ideally the new provider keeps the existing IDs. If they must change, the first FPS should use the payroll ID change indicator and give both the old and new IDs. HMRC’s April 2026 Employer Bulletin warns that missing the indicator, or entering a start date or starter declaration for an existing employee, creates a duplicate employment record.
| Task | Old provider | New provider |
|---|---|---|
| Last pay run before the switch | Processes it and sends the FPS | Checks the figures it produces |
| Records and year-to-date figures | Provides them | Loads and reconciles them |
| EPS for the tax month of the switch | Either, as agreed in advance | Either, as agreed in advance |
| First pay run after the switch | No involvement | Processes it, keeping payroll IDs and year-to-date figures continuous |
| Pension contribution files | Up to the last pay run | From the first pay run |
Timing the switch around your pay dates
Choose a cut-over point straight after a completed pay run, once the old provider’s FPS has been accepted. That gives the new provider a full pay period to load your data before their first payroll.
Keep the fixed deadlines in view. The FPS must reach HMRC on or before payday, and employees must have their payslips by payday too. Any EPS is due by the 19th of the following tax month, and PAYE is due to HMRC by the 22nd of the next tax month if you pay monthly and electronically. HMRC can charge monthly penalties for late filing, so leave plenty of time before the first payday.
Notifying your pension provider
Your workplace pension scheme does not change when your payroll provider does, but the source of the contribution data does. Tell your pension provider who will be sending contribution files from the switch date and arrange access for the new provider.
Contributions deducted from pay must reach the scheme no later than the 22nd day of the next month (the 19th if you pay by cheque), and that deadline does not pause during a handover. Make sure the new provider also has your re-enrolment date, as automatic re-enrolment comes round roughly every three years. Our pension auto-enrolment service picks this up as part of the switch.
A step-by-step switch plan
- Check your notice terms. Find out how much notice your current provider needs and whether any exit fees apply.
- Choose the cut-over pay date. Agree which pay run is the old provider’s last and which is the new provider’s first.
- Request your records. Use the checklist above and ask for the data in a format the new provider can import.
- Authorise the new provider if needed. If they will deal with HMRC for you, you can authorise them as your agent.
- Reconcile the year-to-date figures. The new provider checks the totals against the last FPS before running any payroll.
- Tell your pension provider. Confirm who submits contribution data from the switch date.
- Run and review the first payroll. Compare it line by line with the previous period before you approve it.
- Let your staff know. Tell employees if their payslips will look different.
Common pitfalls to avoid
- Issuing P45s: this tells HMRC your employees have left when they have not.
- New payroll IDs without the change indicator: this creates duplicate employments and incorrect year-to-date records at HMRC.
- Unchecked year-to-date figures: errors carry into every later pay run and into year-end P60s.
- Forgetting the EPS: claims such as Employment Allowance or statutory payment recovery can be missed in the month of the switch.
- Leaving the pension provider out: contribution files stop or duplicate, and payments arrive late.
Frequently asked questions
Do employees get a P45 when we change payroll provider?
No. A P45 is only for an employee who leaves. When you change provider, your employees stay with you and their records simply continue under your existing PAYE scheme.
Do I need a new PAYE scheme?
No. Your employer PAYE reference and Accounts Office reference stay the same. The new provider submits under those references, carrying on from the last submission your old provider made.
Will my employees notice the change?
Their pay, tax codes and pension should carry on as before. The main difference is usually the payslip layout or how they access it.
Can a payroll bureau handle the switch for me?
Yes. Payroll switching and migration is one of the services we offer. If you are new to outsourcing, read what a payroll bureau does first.
Switch your payroll to Payroll Service (UK) Ltd
Payroll Service (UK) Ltd is a Cardiff-based payroll bureau that has run payroll for UK employers since 2011 and works with more than 500 clients across the UK. Pricing starts from £2.50 + VAT per payslip, with no setup fees, no exit fees and no long-term contract; see our payroll pricing. Explore our payroll services or contact us for a free, no-obligation quote.
About Payroll Service (UK) Ltd: we are a Cardiff payroll bureau, established in 2011 and run by director Jack Lloyd-Lewis. We run weekly, fortnightly and monthly payrolls, pension auto-enrolment and CIS for UK employers, overseas companies with UK staff, and accountancy practices that outsource their clients’ payroll, using Sage 50 Payroll and BrightPay.