Getting ready for Real Time Information
Almost all employers will have to report payroll information on or before every pay day to HM Revenue & Customs (HMRC) electronically in ‘real time’ from 6 April 2013.
You ought to be well on the way to being ready for the biggest change in PAYE since it was introduced in 1944 but here is what you should do if you are not up to speed.
Most important, you need to make sure that your payroll software can cope with Real Time Information (RTI) or else you should use a payroll bureau. Manual payroll is no longer an option. HMRC is offering its free Basic PAYE Tools to employers with fewer than ten employees. You should register for PAYE online now if you have not already done so and you are not using a bureau – but if you do use a bureau it will have to register as your agent.
Your data must be complete and accurate. You should check you have such basics as your employees’ full names spelt correctly, and their genders, dates of birth and national insurance numbers correctly recorded.
Your payroll records will also have to include the approximate number of hours a week each employee works, and full details of any employees who are paid below the national insurance lower earnings limit.
There will be new procedures for all the various changes that may occur, including employees starting, leaving or going on parental leave, reaching state pension age, being given a new tax code and several other situations. You will need to record all this information promptly and pass it to your payroll department or bureau. No end-of-year PAYE return (form P35) will be needed for 2013/14, but you will still have to give employees a form P60 and make online returns of employee benefits and expenses.
RTI will not change the tax payment dates. Your monthly PAYE payments must still arrive with HMRC by the 22nd of the month if you are paying electronically and arrive by the 19th if you’re paying by post. You may be charged penalties for late payments.
RTI will bring additional penalties: those for inaccuracy will start in summer 2013 and those for late submissions in April 2014. Finally, don’t forget to keep an eye on the PAYE news and updates page on HMRC’s website. We can help ensure you are ready for RTI, so please contact us.