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:

 

Like this post? Subscribe to my RSS feed and get loads more!