Q. I run a small business, and have recently received a letter from HM Revenue & Customs informing me that there are forthcoming changes which will affect how I process my employees’ payroll. What are these and what should I do?
A. From 6 April 2013, employers will be legally required to send PAYE information to HMRC in real time .
The principle behind this is that employers will inform HMRC about tax, NIC and other deductions when or before payments are made to employees, instead of waiting until after the end of the tax year (Please note, for 2012/2013 you will still need to send your end of year return (P14s and P35) by 19 May 2013).
This means that you (or your accountant, bookkeeper or payroll bureau) will have to:
• send details in the form of an electronic return to HMRC every time you pay an employee, at the time you pay them.
• use payroll software to send this information electronically as part of your routine payroll process.
In readiness for April when you will begin sending your PAYE information to HMRC in real time format, I would suggest:-
Checking your ‘on boarding date’ from HMRC – this is the date from which you must start to make RTI submissions
Making sure your payroll software is ready for RTI
Use a payroll service provider. At Ashdown Hurrey, we would be happy to assist in providing this service for your business.
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)
You need to get prepared by making sure you hold accurate and up to date information about your employees (name, date of birth, gender, address and valid national insurance number)
From 6 April, you will need to change some of the ways you report PAYE including:
Providing new information in your payroll records, such as hours worked
Completing employee information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit.
How you tell HMRC about starters and leavers.
Late penalties may be imposed by HMRC and will be assessed on the number of times a business has been late during the tax year..
At Ashdown Hurrey, we appreciate this change in processing your payroll may seem lengthy and complicated but help is at hand. Our payroll department are fully equipped to deal with this new method of PAYE administration and would be delighted to work with you. Should you have any questions, or be interested in transferring your payroll function to us, please email firstname.lastname@example.org. Alternatively, contact our Hastings Office on 01424 720222 or our Bexhill office 01424 730300.