Are you ready?
From the 6th April 2013 HMRC are introducing a new way of reporting PAYE information, known as Real Time Information (RTI). The introduction of RTI is one of the biggest ever changes to Pay as you Earn (PAYE)
‘Real Time Information’ means that employers, or agents like ourselves, will tell HMRC about employees’ pay and deductions on or before the time they are paid to the employees as part of their payroll process. The information will then be sent to HMRC electronically.
Under the HMRC RTI system, employers will be required to send data about PAYE, national Insurance Contributions (NIC) and student loans every time they pay their employees, rather than with their end-of-year payroll submissions (currently the P35)
KIBS urge businesses to start preparing for RTI roll out. It begins now for the financial year (2013-2014). We will be happy to help you. Contact our team.
You need to think about what RTI means for your business. How you run your payroll will be affected by the change. The information that is to be provided upon submission at every payroll run will automatically affect tax deductions, tax codes, student loan repayments and could affect employees entitlement to the Governments new Universal Credit.
HMRC will also be looking at hours worked alongside the payments made, so there may be far more minimum wage queries to deal with. The information submitted needs to be accurate and up to date each time a payroll run is finalised.
HMRC estimate that up to 80% of companies hold inaccurate or invalid information about their employees, and under the new system HMRC will match each submission to their records and inaccurate or incomplete information may trigger duplicate or incorrect records resulting in incorrect tax deductions and possibly even result in a compliance check.
It will be particularly challenging for those businesses using a manual payroll system to remain compliant with the level of detail required and care will have to be taken to avoid the payment of unnecessary tax or NI contributions.
At KIBS we have taken the necessary steps to ensure our systems and software are able to handle the transition to RTI with ease, giving you peace of mind during the transition period.