Talking Tax

RTI laptopFrom 6 April 2013 employers will have to start reporting PAYE information to HMRC in ‘real time’. You may have already seen this referred to as Real Time Information – or RTI.

What does it mean to you?

It means that employers (or their accountant, bookkeeper or payroll bureau) will have to:

send details to HMRC every time they pay an employee, at the time they pay them,

use payroll software to send this information electronically as part of their routine payroll process.

Significantly more than has been required until now! This means not only more of a burden on the employer, but also employers will need to be highly organised and have all the right systems in place by 6th April to not fall foul of the new regulations.

If you are an employer which this applies to, are you all set? idea to action

Or are you still marking time instead, and wondering what you should be doing?

Whichever you are, use the lists and checklist below to see if you are ready to roll or there are things you need to arrange before the new tax year cometh and the old way goeth:

The links below take you to detailed guidance on getting your business ready to report PAYE in real time. There are also links to other PAYE information you may need throughout the tax year within the literature the links take you to – all on HMRC’s website.

bright ideaSo let’s get started:

You will need to take several actions to prepare for operating PAYE in real time, which are set out below. Decide which actions apply to your business – you can use the checklist provided to tick them off as you go.

WHAT TO DO:

Before 6th April:

*** If you run your own payroll system, you need payroll software that is ready for RTI in order to send your PAYE information to HMRC online, every time you pay an employee. You can do this in three ways:

  1. Using commercial payroll software? Upgrade your existing software if necessary (your provider can advise on this), or
  2. Use a payroll service provider, such as an accountant or a payroll bureau, who will do it for you, or
  3. If you employ nine or fewer people, you can use one of the free payroll software packages or HMRC’s free Basic PAYE Tool. Go to www.hmrc.gov.uk/rti for more information.

If you are planning to send your returns yourself, you need to register for PAYE Online to get your PAYE login details (if you have not done so already).

Next: 

*** If you use an agent, payroll bureau or payroll service provider, you must talk to  them now about the service they will provide for you in future, and ask what you need to do to get ready for RTI.

*** If you pay by Bacs using your own Service User Number, you need to speak to your solution supplier or bureau.

And: 

***You need to get prepared by making sure you hold accurate and up-to-date information about all your   employees (name, date of birth, gender, address and valid National Insurance number).

From 6th April:6 ways pic for blog

You need to change some of the ways you report PAYE, including:

  1. Providing new information in your payroll records, such as hours worked.
  2. Completing employee information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit.
  3. Letting HMRC know whenever you change a payroll ID – otherwise HMRC will treat the change as a new employment, which will result in duplicate employment and incorrect tax codes.
  4. How you tell HMRC about starters and leavers.

*** Ensure you or your payroll service provider uses RTI-ready payroll software to send your real time PAYE information because you won’t be able to use HMRC’s PAYE Online service (sometimes called the ‘portal’) for this.

*** You still need to send your end-of-year return (P14s and P35) for the year 2012-13 by 19 May 2013.

The individual steps are expanded on here:

http://www.hmrc.gov.uk/payerti/getting-started/rti.htm

And they include:

–          Getting your software organised or using a payroll provider

–          Checking your employee data is correct

–          Checking you are registered for PAYE online

–          Including new information in your payroll record keeping

–          The action to take if you pay employees by Bacs

–          How to be ready to update HMRC with your latest payroll data

–          How to start reporting your payroll information

–          Where to go for more help

HMRC logoThe full instructions are here:

www.hmrc.gov.uk/rti

And there are webinars on the topic here:

http://www.hmrc.gov.uk/webinars/live.htm#1

Make sure you’re ahead of the game Real Time! And if you’re still unsure of where you stand, make the most of an opportunity to ask the real McCoy when Darrell Warren from HMRC talks tax at the Wired Wessex networking evening on Thursday 25th April:

‘Let HMRC help!’  http://www.wiredwessex.co.uk/events/1576

And keep in touch for more information on our website:

www.wiredwessex.co.uk

and on Twitter @Wiredwessex

or Facebook: www.facebook.com/wiredwessex 

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