The requirement for real time information (RTI) to HMRC on payment to employees was phased in on 6 April. This means that details must be sent to HMRC every time a payment is made to a member of staff. The method of doing this is to send this information electronically using payroll software as part of the routine payroll process. The Revenue was aware that this has been causing headaches for many small businesses.
Those finding it most difficult run a payroll once a month, but actually pay staff more often, so to comply with RTI they would have to completely change their procedures. Many were just not able to do it by 6 April.
HMRC has therefore temporarily changed the rules for businesses with fewer than 50 employees. They can report all payments as and when the monthly payroll is run, as long as it is before the 6th of the following month.
At present, this just gives organisations an extra six months to get ready for RTI as it only applies until 6 October. It will, however, be reviewed in the interim. The chairman of the Federation of Small Businesses, John Walker, has said that he hopes it will become a permanent measure. This is not a sure bet so, in the meantime, all small businesses need to consider how to be ready by October and be able to take appropriate action.
Reminder of the RTI Requirements
Whether you are subject to the real time requirements or are allowed to report monthly, your business must be registered for PAYE online, and it is no longer possible for the in-house payroll function to be manual unless the details are passed to a payroll bureau to make the returns. If you want your outsourced bookkeepers to do this, they must be given your PAYE login details. Payroll software providers are building in the RTI function to their products and existing systems have had to be updated to include it.
It is vitally important to have complete and accurate information on each member of staff, however often, and however much, they are paid. Even temporary staff must be included if your business pays them. RTI may mean that additional information is required on your payroll system. Full guidelines on the reporting requirements are posted on the HMRC website.
Even if you outsource your payroll operation, RTI is your own responsibility, so you need to be sure that your provider is RTI ready. If you use your outsourced bookkeepers, they should have already informed you of what you need to do to be ready. Do talk to them if you have any concerns about RTI.