From April 2013 there is a big change in the way payroll is to be operated. It is called Real Time Information (RTI).

All employers will have to report to HMRC in real time the payments they have made to their employees.

 

Currently this is done once a year after the end of the tax year. 2012-13 is the last time this will happen.

This means:

  • You will no longer be able to operate a paper based payroll system, you must do it online, either yourself or by using a payroll service.  See below for a link to options for doing this.
  • You must submit your payroll information to HMRC every time you pay an employee, whether that’s weekly, fortnightly, monthly or occasionally.  Your payroll process date, as reported to HMRC, must be the date you actually pay your employees.
  • Any casual workers, that you currently employ, but do not need to report to HMRC because they earn below the lower earnings limit, MUST be included on your payroll from April 2013.
  • All of your employee information must be correct and you need to check this with them before you start operating RTI.  Their names must be included in full and their date of birth and national insurance number must be correct.  HMRC will not accept submissions when information is incorrect.

RTI processing means that HMRC will know how much PAYE they are expecting you to pay and as such there will be fines for payments received later than 22nd (for online payments) of the following month.

Employers need to look out for a letter from HMRC giving them the date they must start operating RTI – make sure you pass this information on to your accountant or payroll service as soon as you receive it as some employers will be required to start earlier than April.

So are you ready?  

You can download the HMRC Business Readiness Checklist by clicking here

Other Useful Links:

 

Last Saturday I exchanged left brained activity for some creative right brained activity in the form of a baking day.

You can see all of the lovely things I baked and made in the photo on the left.

It got me thinking about the similarities between baking and bookkeeping. Yes really.

When you bake a cake you follow a recipe and if you miss out any ingredients or steps your cake wouldn’t work out right.

The same is true of bookeeping and this was illustrated to me with perfect timing by an online colleague.

We are both part of an fabulous google group for entrepreneurs called Money Making Magic, which you can read all about here
On Tuesday and Friday mornings a lot of members of that group meet up online for a virtual coffee morning to discuss and get support for anything to do with their business, known as soul chats.

Last Friday some members were discussing how they struggle with cashflow so I suggested that they download my cashflow spreadsheet and instructions and then come back to me with any queries.

What my colleague discovered was that she was missing a vital ingredient from her cashflow recipe and that was why she had struggled with it for so long.

Here’s what she said in the Google Group on Saturday morning:

“I just wanted to share my revelation this morning.  Yesterday on the Soul Chat, the wonderful Jakki Francis shared her simple Cashflow spreadsheet, which had one single row which had been missing from mine FOR YEARS! It was the “carried forward” row.  Seems daft, doesn’t it?
This morning I have done a cashflow forecast by day from now until the end of 2012 and boy, oh boy….what a revelation.  I see it all now, the whole picture.  I can hardly believe it!
Jakki Francis  – you rock!  Thank you!”

How lovely and gratifying to receive that. With one simple adjustment to her cashflow recipe she was able to forecast clearly what her business will be doing until the end of the year.

You can get my complimentary cashflow forecast spreadsheet, written and video instructions by joining my newsletter which comes out once a week and which you can join by completing the form on the top right of this page

Recipe Links:
Cherry Cake by Delia Smith
Pear and Almond Cake by Hugh Fearnley-Whittingstall
Bara Brith – A Hairy Bikers Mums Know Best Recipe
Coffee Ice Cream by Nigella (I substituted instant coffee and Tia Maria and it is delicious)
Blackberry Liqueur (although I made it using defrosted frozen raspberries and mixed summer fruits)

HMRC have announced a new procedure whereby individuals can email them for written confirmation of their National Insurance number.

You can do this using form CA5403 – see the link below.

If your National Insurance number is incorrect this is likely to mean that any NI contribtions you pay will not be being credited to your personal record and will affect any claims to benefits and your state pension record.

HMRC advise:

‘If you’ve lost or can’t remember your National Insurance number or can’t find it on official paperwork you can email HM Revenue & Customs (HMRC) for written confirmation of your number. You can also use this service to let HMRC know that you’ve changed your name or address.’

‘National Insurance cards are no longer issued and your National Insurance number is not proof of your identity.’

Links:

HMRC information

Form CA5403

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