The introduction of PAYE RTI represents a fundamental reform of Pay As You Earn, requiring all UK employers to notify HMRC of their liability to PAYE at the time or before they make payment to their employees. Payroll software will collect the necessary information and send it to HMRC via the Government Gateway. It represents the largest change to PAYE since its introduction in 1944, where previously employers paid PAYE due to HMRC on account but only declared and reported their PAYE at the year end, with a P35 return.
From April 2013 all employers will be mandated by law into PAYE RTI requiring them to submit their RTI return every time employees are paid as part of payroll arrangements. Pension providers are affected as well as employers.
There will be no parallel operation of old and new PAYE regimes – once in PAYE RTI an employer will continue in PAYE RTI.
HMRC intends to mandate small and medium employers into PAYE RTI in April 2013 and is prioritising these businesses so that the overwhelming majority of UK employers will be mandated into RTI in April 2013 at the start of the tax year. Larger employers will follow so that all UK employers and pension providers will be in PAYE RTI by October 2013.
The dates on which payment of tax and National Insurance deductions are made to HMRC remain the same, either the 19th or 22nd of the month or quarter following the reporting period.
There are a number of important preparatory steps employers need to take in good time before April 2013.
PAYE RTI requires complete accuracy of employee data including, name records, dates of birth, National Insurance Numbers and it is important this data has been checked and verified.
Employers should take steps to validate the accuracy of their payroll records well in advance of their being mandated into RTI. Part of the PAYE RTI joining process for larger employers requires them to align their payroll data with HMRC’s records to ensure they reconcile.
All UK payroll software has effectively had to become PAYE RTI compliant. Employers or their payroll providers with a software maintenance contract can expect their software to be upgraded but should liaise with their software supplier to ensure this is done well in advance.
PAYE RTI software allows employers or their agents to submit RTI returns directly over the Government Gateway via an internet connection. At the very least, compliance with the Interim Solution for RTI requires employers payroll is processed on a PAYE RTI version of their payroll software.
Employers should review their current payroll procedures and liaise with their payroll service providers or payroll software suppliers and assess their preparedness for PAYE RTI and their ability to demonstrate their compliance with their reporting obligations. Employers should be aware of the importance of ensuring that if not using BACS to pay employees the sums paid to employees, for example via internet banking, must under RTI always reconcile with their mandatory RTI internet return to HMRC.
How can we help?
There are various ways …..
We run a payroll bureau service for businesses of all sizes. The majority of our payrolls have gone “live” with RTI already as part of the “pilot” scheme – a trial before it goes live for all employers.
We provide payslips in a number of ways to suit you and your employees – plain paper payslips, emailed secure PDF payslips, e-Payslips accessed via a secure portal, secure payslips – you decide. Similarly payroll reports can be supplied as you want them.
We can provide payroll software that is fully RTI compliant – in fact, the one we are using ourselves.
We can help you set up your payroll and migrate data from your old software to new software.
Contact us NOW!