From April, employers will be required to move to a new way of reporting PAYE. For the vast majority of employers, the first "real time" return will be the first employee payday on or after 6 April 2013.
Reporting PAYE in real time will be quicker, easier and more accurate for employers.
Your payroll software will need to calculate your PAYE and send the PAYE information to HMRC as part of a routine payroll operation. You should also look carefully at your payroll practices, as – although the way PAYE is calculated is not changing – some of the practices that you use may not work for real time reporting.
What does it mean in practice?
Reporting PAYE does not change how or when people are paid, or when employers pay income tax and national insurance to HMRC.
Instead of sending in the P14 and P35 forms at the end of year, you (or your agent, bookkeeper or payroll bureau) will:
- send a Full Payment Submission (FPS) each time, or before you pay employees;
- send an Employer Payment Summary each month, which shows any adjustments to the amount you owe;
- send an Earlier Year Update to correct errors or make adjustments to earlier years.
It’s also worth noting that the FPS is not available through HMRC Online – you wil need to use RTI-enabled payroll software to generate your return.
What you need to do
If you haven’t already, you need to start getting ready from today. First, speak to your payroll software provider, if you have one, to make sure your software will allow you to meet your obligations from April 2013.
If you do not use a payroll service provider or have software, there is a wide range of commercial payroll software products available – including some free/low cost products. A list of HMRC-recognised products can be found on our website.
HMRC’s free basic software, Basic PAYE Tools, will also be available for the smallest employers (with nine or fewer employees).
It is also vital that you check the employee information you hold is accurate and up-to-date. It is particularly important that surname, forename, gender, address, date of birth and national insurance number are correct and in the right format.
We want to help and support all businesses to make the change, so we will therefore not be imposing any penalties for in-year late reporting until 2014.
This will be a year of transition and HMRC will be doing all it can to help business make the change. In addition to our website, further support is available through YouTube and via live and recorded webinars (online seminars).
For more help and advice about reporting in real time see HMRC’s websiteJane Brothwood is HMRC’s head of Real Time Information Communications at HMRC This article was first published as a blog on HMRC's website and is reproduced with permission
Up to 500 employers at a time will be able to join live webinar sessions on Real Time Information hosted by HMRC experts throughout March. The interactive sessions last up to an hour and allow employers and agents to ask questions on RTI. Several RTI sessions a day will be held, so that employers can join in when it is convenient for them. The webinars are free but users must register in advance.
A range of support is available for employers, including:
Face to face events
Online interactive sessions, including Twitter Q&As
In this issue
- Remember, remember?
- Equal justice for all?
- Compatibility: devolution issues reborn
- Profiting from the past
- RTI for PAYE - are you ready?
- Reading for pleasure
- A modest proposal – civil marriage ceremonies for all
- Opinion column: Alistair Dean
- Book reviews
- President's column
- Fee review: as you were
- Time to draw a line?
- The pay gap: seeking a cure
- Wealth management: Personal injury trusts - how to best invest
- Wealth management: Discretion - the model of choice
- Wealth management: Inheritance tax - discounts up front
- Wealth management: Pensions - time to look ahead
- Whose privilege is it, anyway?
- FLAGS unfurled
- Percentage game
- Rent, rent and rent again
- Sport, rights, and the internet
- An innocent mistake?
- Scottish Solicitors' Discipline Tribunal
- The trouble with in-house lawyers
- Lease of life for the High Street?
- PSG update
- Vacant and ready
- ABS in waiting
- Better ways: where to start?
- Keeping errors in check
- Ask Ash
- How not to win business: a guide for professionals
- What does a speculative fee allow?
- Law reform roundup