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Real time information – are you ready?

According to a PwC survey only one five small business are prepared for the introduction of the Real Time Information (RTI) which is being introduced from 6 April 2013. Nearly half of the small business (46 per cent) had no knowledge of RTI with a further 35 per cent only vaguely aware of the forthcoming changes to payroll reporting. So are you ready?  If not then below is a general overview and a link to checklist that the HMRC have produced.

As a general rule under RTI you must submit information on tax and national insurance  to HMRC on, or before, the date salaries are paid to employees be that weekly, 2-weekly, 4-weekly or monthly, rather than at the end of the financial year and this system will replace P35’s and P14’s after the 2012/13 year end.

According to the HMRC, the aim is to modernise / simplify PAYE and it will make it easier to ensure employees pay the right tax after changing jobs, ensure deductions are as accurate as possible.  It will also support the use of the Universal Credit system which is replacing tax credits (working tax and child tax credits) and benefits payments (job seekers allowance, employment support allowance, housing benefit) from October 2013.

Thankfully this should not increase administration on ‘normal’ payroll runs as the majority of commercial payroll software will produce the RTI information automatically. However it may be wise to carry out an audit of the data you hold on existing employees to ensure everything is in place and to check the way new starters are processed.

The HMRC will allow some extensions to time limits as follows:-

  • Some off payroll payments, for instance payment on account of earnings can be submitted the next time the regular payroll is run.
  • Certain variable payments for work done on the same day will be allowed to be reported the earlier of seven days or, the next regular RTI filing date.
  • Benefits and expenses subject to Class 1 NIC but not PAYE will be extended to the earlier of 14 days after the end of the tax month in which it was paid or the date on which NIC’s are calculated.

So what do you need to do? Well here is a link to the HMRC’s useful checklist of ‘to do’s and if you need any further assistance then just get in contact with us.

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We can help you hire and retain the best employees, manage your employees more successfully, and improve employee motivation. Whatever your HR outsourcing needs, In2HR can assist any company within the Thames Valley areas, including Berkshire, Buckinghamshire, Oxon and Surrey. So why not contact us today.

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