PAYE Real Time Information – Is your business ready?
In a recent survey by the Federation of Small Business (FSB) a quarter of small businesses were still unaware of forthcoming changes to the way information for PAYE will be collected. Real Time Information (RTI) is due to come into force from April 2013, and will see a new way for businesses to report PAYE information. Rather than sending PAYE information in one go at the end of the tax year details will have to be provided every time a payment is made, at or before the time it is made. Whilst 16% of businesses said they were fully aware of RTI a further 60% still had not received any communication from HM Revenue & Customs. FSB national chairman John Walker said “With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are that it is just around the corner.” He added “There are a number of steps that a business must complete before it can provide RTI to HMRC so it is critical that those affected know about it”. Consequently it is essential that businesses start planning and putting the necessary changes in place. PAYE itself is not changing – just the way, and how often you send PAYE detail to HMRC.
This means that you, or your accountant, bookkeeper or payroll bureau, will have to:
- Send details every time a payment is made, at the time it is made
- Use payroll software to send details electronically as part of your routine payroll process
So what needs to be done to get ready?
If you run your own payroll system and use software to calculate and submit your employees PAYE information then you will need to ensure your software is updated to an RTI enabled package (If you have a support contract your provider should have contacted you about this).
If you prepare your payroll manually, in future you will need to send your PAYE information to HMRC online – using PAYE RTI enabled software. You can do this using commercial payroll software or through a payroll service provider who will do it for you.
If you have 9 employees or less you can use HMRC’s free Basic PAYE Tools (which will be updated for RTI in February 2013).
If you use someone outside your business to run your payroll talk to them about the service they will provide for you in future, and ask what you need to do to get ready for RTI.
To get ready for RTI you will also need up-to-date details for ALL your employees – including temporary and casual workers and employees paid below the National Insurance Lower Earning Limit. More information is available on the HMRC website hmrc.gov.uk/rti including details of the new data you will need to provide about your employees.
Lillian Long is a lifelong resident of Andover where she works as a front desk agent at a hotel. She is writing about the Online Local Bookkeeping in Andover, The Local Accounts Department Service Andover, The Financial Management Centre Andover.