The PAYE system is changing from April 2013 and, if you operate a payroll, YOU WILL BE BE AFFECTED.
HM Revenue & Customs are introducting a new process called Real Time Information, or RTI. The official reason is so things like tax credits and benefits are more accurate. A by product is that HMRC will know immediately if you get behind with your PAYE and NI payments.
Under RTI employer’s will have to send HMRC details of pay and deductions EVERY TIME YOU PAY SOMEONE. Currently employers only submit this information once a year. This could make an already complicated payroll process even more so, especially for those who don’t use state of the art payroll software.
One key issue will be the first submission in April 2013. The data in this submission will be used to confirm the information you hold about your employees is aligned with HMRC. If it is not then submissions may fail causing additional administration to get it right. It is because of this we strongly recommend that you don’t ignore RTI until it actually comes in. Those who aren’t prepared by April 2013 risk an administrative nightmare.
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David K Crossley CTA, ATT
Member of the Chartered Institute of Taxation