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
impleented, 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, TheFinancial Management Centre Andover.
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