HM Revenue & Customs (HMRC) will be writing to every employer in the UK in October to highlight the key changes that will follow in PAYE reporting as Real Time Information (RTI) is brought in from April next year. The department will send its latest Employer Bulletin, many companies will be hearing about these changes for the first time.
Real Time is the biggest thing to happen to payroll since 1947 and will affect every employer in the country – from the huge multi-billions pound revenue companies to the local shop with one shop assistant.
Between March 2013 and October 2013 HMRC will ask every employer to start submitted payroll information for each period an employee is paid, therefore is you are on monthly pay you will have to submit to HMRC on a monthly basis and if you are weekly you will have to submit weekly.
At present HMRC collect payroll data on an annual basis when the employer submits the P35 between 5th April and 19th May. This scheme is to be scrapped and every employer is going to have to submit to HMRC, electronically, however frequently their payroll run is.
The main reason for this is at present HMRC do not know how much PAYE is owed from each company until they submit their P35 at year end, this way HMRC will be able to pursue late payments of PAYE Liabilities more effectively, this will also reduce Universal Credit fraud (formally known as Tax Credits) as HMRC will know how much each employee has earned constantly and how many hours a week they are working. The plus side to employers is that there will be no need for P35s or P14s. The new system will also simplify starting and leaver processes.
If you need any help with getting your company ready for RTI please do not hesitate to contact us on 01229 490341.