The way you report PAYE is changing from 6 April 2013 and you must act now
This is the biggest change to payroll reporting since 1944 and the change is compulsory. This will affect everyone who runs a payroll, in particular anyone who still runs a paper system, which is now obsolete.
So what is Real Time Information – RTI?
Historically HMRC expected reports for your payroll on an annual basis (P35 and P14) but these reports are now expected every time you make a payment to an employee. This is so that HMRC are informed in Real Time of all PAYE information. So if you pay your staff weekly, then each week you must submit the required forms online through a suitable payroll package. You must run a payroll each time you actually pay any money to an employee, on or before the date you provide the payment.
- Enable HMRC to pursue late payments more effectively
- Support the payment of Universal Credits
- Reduce Tax Credits and fraud
- Simplify the starters and leavers process
What do you need to do?
If you are signed up to BFMS Payroll Bureau Service or we have historically dealt with payroll for you, then you do not need to do anything other than what we have asked you to complete already
If you run your own payroll, you need to get RTI ready now.
HMRC provide free online software but only for simple payroll reporting with a limit of 9 employees. If you are currently using this, then check that it is still suitable for your business reporting requirements.
For businesses employing over 9 staff, have a more complex payroll or provide a professional payslip, you will either need to outsource your payroll to us, or purchase suitable commercial software along with annual software support and set up your payroll yourself.
There are many changes to the current process but for general guidance we have provided some information:-
The main changes are:
- Only real employees can be paid.
No more temporary date of births, NI numbers or addresses. Employees will only be paid when their full details have been provided on a P46 and any P45 information has been entered. This must include full name (including middle names) date of birth, gender, full address including postcode. All employees must complete form P46 even if they give you a P45
- Disclosure of contracted hours
Each employee must state their contracted hours and these hours must be entered into the payroll system. Irregular workers can complete an irregular hour’s section.
- The pay date must match the processing date
If you pay your employees say Monday to Sunday, but the pay is paid into their banks on the following Friday, the process date must match the pay date, not the process date.
- Non paid employees in the period must be put on hold
Even if you are not making a pay run for one of your periods, you must still submit an online payroll and flag your employees as still being employed, if you don’t HMRC may remove them from your company.
- Once a pay run has been completed it is closed
If you run a payroll, but then realise later that an error has occurred, this is to be adjusted next time
Before you move across to RTI, you must complete an Employer Alignment Submission (EAS) and match your records to HMRC
Each time you make a payment, you must send HMRC a Full Payment Summary (FPS)
You must also send an Employer Payment Summary (EPS) for any deductions from the P32 such as CIS suffered, Maternity, Paternity and Sick Pay
When an employee leaves your company, you still issue them with a P45 but you no longer need to send one to HMRC
When an employee starts your company, you must get a completed P46
For more information on RTI or for a payroll bureau quotation, please contact the office and ask for Gemma or Alison.