It is fast approaching the time for HMRC’s latest attempt to make life easier for us – or is that easier for them!
From 6th April 2013 all businesses with less than 5000 employees will have to report their weekly or monthly payroll details online to HMRC each pay period. The preparation of paper documents will no longer be allowed.
With the advent of the new Universal Tax Credit, HMRC wants to have full current information about all employees, even those paid below the National Insurance and tax thresholds, to ensure that the benefits are paid correctly. They will know whether higher paid employees are eligible to receive family allowance payments. They will also be in a position to ensure that employers are paying over to them the correct amounts of tax and National Insurance each month as it arises. We anticipate that they will shortly be expecting to take these payments directly from employers’ bank accounts by direct debit, as they currently do with VAT. Penalties for late payment already exist, monthly penalties for late submission of the information are probably not far behind.
HMRC suggest that employers should prepare for RTI immediately, so that everything is in place by 6th April 2013.
- Software will be needed to process your payroll. Some packages may be free of charge. If you have software it needs to be updated to a version with RTI functionality. Alternatively you need to find a payroll provider to do the job for you. (DEB Chartered Accountants provide payroll services to many of our clients and would be happy to help if you wish)
- Check that your employee data is complete and correct. You will need to check, and if necessary, update the data for all your employees. Name, date of birth, National Insurance number and gender are all crucial.You should also have a complete current address. This applies to all employees, even temporary, seasonal, casual or irregularly paid employees.The verified data should all be entered on to your system in advance of your first submission.
- You should register with HMRC for PAYE online. They will then provide you with login details and passwords which your new system will require
- Collect additional information about your employees.Information will be requested about the number of hours your employee works each week. If an employee is paid irregularly, say just once annually, you will need to set an irregular payment indicator so that HMRC does not think that the employee has left your employment when they miss a pay cycle.
When the new system starts, you will have to report all payroll information electronically, via your payroll system, at the time of processing each weekly or monthly cycle. There will be no facility for reporting by email or by filling a from on HMRC’s website.
If you feel that your business requires any assistance with any of the above issues then please do not hesitate to contact us at DEB Chartered Accountants.