HMRC PAYE Changes - Introducing Real Time Information
The current PAYE System which relies on employers annually submitting their tax return at the end of the year is being changed. RTI aims to collect the information about tax codes and deductions automatically each time an employer runs their payroll, this would then be submitted electronically to HMRC when the employees are paid. The employers would still calculate the tax codes and deductions but as it is Real Time Information it should lead to fewer errors at HMRC as the information would be submitted at the same time the employees are paid.
- For those paying by BACS it would form part of their submission
- For those paying by cheque; as it is the banks intention to phase cheques out over the next few years this would be an ideal opportunity to change payment methods.
- For the smaller companies who do not use BACS there will be an internet channel though the Government Gateway.
HMRC will be piloting the Real Time Information system in April 2012 with the hope that all companies will be migrated over by the end of 2013. Employers will still be responsible for tax deductions and calculations but instead of submitting this data once a year they will be required to do so at the same time as their payroll, be that weekly, fortnightly or monthly. Employers will need to ensure that their BACS solution suppliers for payroll and payments are able to support RTI and upgrade their systems accordingly.
Whilst these changes will initially require employers to outlay extra time and money, the RTI initiative will be a big benefit, in that their end of year processes will be significantly reduced and more accurate.
APT has been actively involved in the consultation process with HMRC and BACS and is looking at the technical specifications that have been issued. We will be one of the market leaders to produce software to enable this change to PAYE data capture and will be participating in the pilot scheme in April 2012.
Employers do not need to do anything right now; however your software will need to be able to submit the additional PAYE Real Time Information along with your BACS payments by the end of 2013.
If you would like any further information please do not hesitate to contact us on 020 8760 9898 or email firstname.lastname@example.org.