Last year we published information about the forthcoming changes to PAYE reporting by employers. The time for Real Time Information (RTI) is now upon us and hopefully, you are already prepared. Starting in April, employers should be reporting on their PAYE records for every employee every time they are paid. Some may be favoured with a window of a few months after that before compliance is expected from everyone in October.
The Seven Day Deadline
Under RTI, electronic returns must be made within seven days. Unless you were in one of the pilots for the scheme that have been doing this since November, this will be a big change from the former annual reports required.
According to the Forum of Private Businesses, many small businesses are still unaware of these new rules. However, HMRC is writing to all employers to explain what they will have to do. They have also published information about it on their website, and have made an explanatory video that is available on You Tube.
How RTI Will Help Business and the Economy
RTI should make records at HMRC more accurate, so that employers can be given the right tax codes to use and people don’t pay too little or too much tax. HMRC also claims that it will save employers some of the money currently spent on administration at the year end. Whether it does or not, all employers must comply with the new arrangements by October 2013.
Lin Homer has been Chief Executive of HMRC since January 2012. She said, “RTI delivers on all fronts. Business costs will be cut by £300 million a year, employees will be taxed more accurately and fraud and error in the tax credit system will be reduced by hundreds of millions of pounds every year.”
Get Help if you Need it
It is therefore even more important than ever that your own payroll information is accurate and up to date at all times. If your outsourced bookkeepers are dealing with it, there should be no problem. There are still concerns that some small businesses will find it difficult to meet the deadlines after each payroll is run. But Lin Homer believes ‘If your data is in good shape then it’s going to be easy for you to access RTI. A small business that is not moving into the digital world is not doing itself any favours.’
So if you have any concerns about your ability to comply with RTI, you need to act now. Why not get together with your outsourced bookkeepers to discuss how they can help.
