Real Time Information
Announcing HMRC’s new requirements for payroll processing
The biggest single change in PAYE since its introduction in 1944 will soon be upon us. Real Time Information (RTI) will be introduced in April 2013 and will replace the usual end-of-year electronic filing process. An electronic submission will instead be submitted to H M Revenue and Customs (HMRC) every time an employee is paid. HMRC’s assertion is that RTI will make operating payroll easier for employers and make it simpler for HMRC to ensure that PAYE deductions are more accurate. There will however be more work initially for employers and additional costs. As with all HMRC filing requirements penalties will be levied for employers who do not comply with the legislation.
Although the new system will apply from 6 April 2013 it is essential that employers start to think about it now. The initial process is to ensure that the information that is held for each employee is complete and correct and this will be matched with the data that is held by HMRC. If the data is not correct when the first PAYE submission is made it will be rejected and penalties may be levied. If you deal with your own payroll or use a third party we recommend that a review is undertaken as soon as possible to ensure that your records are complete.
Employers with nine or less employees will be able to submit information using HMRC’s own basic software. Software from an accredited provider can also be used. If you currently use payroll software we advise you to check whether the provider has applied for accreditation.
HMRC are issuing letters and a help sheet to all employers providing detailed information on the action required to get ready for the change. If you currently prepare your payroll in-house this is an opportunity for you to consider whether in view of the forthcoming changes this is the right course of action going forward. You may wish to consider us processing your payroll for you. The benefits of doing this are:
• Greater confidentiality regarding salaries and particularly amounts withdrawn by directors.
• The submission of payroll information to HMRC is not disrupted by the payroll administrator’s absences from the office.
• Confidence that SMP, SSP, student loan and other deductions are dealt with correctly.
If you would like to discuss how we might help you with your payroll or if you have any queries regarding this change please give us a call.