Real Time Information – employers beware!
Under the current PAYE system employers submit year end returns including form P35 and P14’s at the year end. These returns tell HM Revenue & Customs (HMRC) what deductions have been made from employees pay and at that point HMRC are able to check those figures against PAYE payments they have received during the year.
Under Real Time Information (RTI) employers will tell HMRC what deductions have been made whenever employees are paid, with the result that:
- The PAYE system becomes simpler
- Year end returns become a thing of the past
- Employees tax records become more accurate
- HMRC are able to police late PAYE payments better and issue penalties
The RTI system will be phased in from April 2013 with all employers having to be using it by October 2013.
The new submission of details will take place through the employers or payroll bureau’s software or if there are 9 or fewer employees the free HMRC Basic PAYE Tools package can be used.
Most employers will submit their RTI information either through the Government Gateway or via the Bacs system, although the latter option is still being discussed with the banks.
Are You Prepared?
All payroll software providers and payroll bureaus are in the process of getting ready to deal with the implications of RTI and employers should start to be making sure that things are going to be ready for April next year.
More importantly employers need to start making sure that all of their employee information is complete and accurate.
All employee data should be reviewed now and if there are any gaps or inaccuracies they should be completed and corrected well in advance of April next year.
In order to ensure all is correct look to verify the data against official sources such as HMRC records, passport, driving licence or birth certificate.
see HMRC for more information.
If you need any help or support with this new process call our payroll team today