Now that everyone has finally gone back to work after the Christmas and New Year break, HM Revenue & Customs (HMRC) is at pains to point out the fact that, as of April this year, all payroll reporting must be done in real time and employers must be ready.
The change will mean that information about all PAYE payments needs to be submitted to HMRC online each time a payment is made as part of the payroll process, rather than at the end of the year as they are now.
According to HMRC, the current system of submitting information leads to employers often paying the wrong amount of tax for extended periods of time, so submitting payroll details using real time information (RTI) will lead to correct payments and reduce the administrative burden on small and medium-sized enterprises (SMEs) particularly.
The department has said that employers should take the next few weeks to prepare for the implementation of RTI and the most important thing is to check that their payroll software is RTI compliant. If it is not, they must update it, acquire new software or use a payroll provider.
The next step is to ensure that their employee data is complete and correct. This means that no nicknames or shortened names can be used and employees must have their correct and full address on the system along with their date of birth and National Insurance number.
Once this is done, the employer must register for PAYE Online, through which HMRC will send important notices and messages, such as if an employee’s tax code changes.
All the information is contained on the HMRC website under PAYE in real time, along with a useful webinar on the subject .
As an accountant, Simon Denton specialises in providing PAYE advice, support and guidance.