PAYE- Real Time Information
Important Newswire from Tuchbands ,Chartered Accountants , in Golders Green, North West London
What is Real Time Information?
As from April 2013 it will be mandatory for all employers to implement Real Time Information (RTI), a new system for submitting payroll information to HM Revenue and Customs (HMRC).
Under the current PAYE system although payroll is run weekly or monthly, the details of payments and deductions made to individual employees are not submitted to HMRC until the end of the tax year by submitting the year end form P35 and P14.
Under RTI, Tuchbands as your agents will be required to make regular payroll submissions for each pay period during the year detailing payments and deductions made from employees each time they are paid, whether weekly or monthly depending on your payment frequency.
How Does RTI Affect You?
1. Data Validation
We will need to send your employee data to HMRC which they will validate using their own databases.
Accordingly, we will be sending you details of the standing data which we currently hold.
To avoid any discrepancies during this validation procedure you will need to ensure that the employee information we currently hold is complete and up to-date.
In particular, you need to ensure that the following employee details are accurate:
Full employee name (not just initials)
Date of Birth
National Insurance Number
Full postal address
2. New employee details
Under RTI we will not be able to process pay for new employees which fail the HMRC validation checks. Therefore, the above employee information is required for all starters.
Under RTI we, as your agents operating PAYE, will have to inform HMRC of all payments to your employees including casuals even though their earnings are below the National Insurance Contribution (NIC) and tax thresholds.
Accordingly, if your business is registered for PAYE you will need to supply us with the same employee details for casuals as for regular employees and we will have to record casual earnings on the payroll just like for regular employees.
If all employees are casual then there is no need to specially set up a PAYE scheme.
4. Payroll processing
It is important that the information provided is accurate as we will be unable to make any changes once the payroll submission has been sent to HMRC.
5. Payments to HMRC
HMRC will be aware of the PAYE and National Insurance due on a monthly basis and will commence collection procedures if these taxes are overdue