PAYROLL INFORMATION - ARE YOU RTI READY?
There is a major change in the way payrolls will be administered on the horizon
Real Time Information (RTI) will be brought into practice between April 2013 and October 2013 - all employers will be required by Law to submit a Full Payment Submission (FPS) Return to H M Revenue & Customs every time they pay their employees.
WHAT IS RTI?
RTI will be HMRC’s prescribed way for employers to submit data in real time i.e. at the time the employee is paid their earnings. The employer will be required to report information about their employees PAYE Income Tax, National Insurance contributions and other deductions either weekly or monthly depending on when wages are paid. Currently these reports are submitted by way of an Annual Return after the tax year has ended.
WHAT IS EXPECTED OF ME AS AN EMPLOYER?
Whether you pay your staff weekly or monthly, each week or month before the pay day you will be required to submit the pay information to HMRC showing all pay and tax details. If you are late in doing so a penalty will be incurred.
Every employer will be required to complete an Employer Alignment Submission (EAS) in order for HMRC to set you up on their system. The information you should have on all current employees is as follows:
- Full formal name (including any middle names) as appears on their birth certificate, driving licence or passport
- Date of birth
- Address including UK postcode
- National Insurance number
If you are a small employer (less than 250 employees) this EAS may be part of the first Full Payment Submission (FPS). If your software allows, you may be able to perform a test EAS before your FPS is due. HMRC will advise you if the EAS is required if you are transferring to RTI before 6 April 2013.
Additional information will be required for all new starters and leavers under FPS which may necessitate a change in your current procedures.
WHAT CAN I DO NOW?
- Check that your payroll software will be ready in time and is compliant with the changes in legislation.
- Ensure you have all information to hand necessary to complete the EAS (Employer Alignment Submission).
- Start to consider any possible changes required to your procedures in respect of new starter information.
- Order new stationery.
Following submission of the EAS HMRC will contact you if they find any data inaccuracies. HMRC records are updated to reflect the information you provide therefore it is vital that your payroll information is accurate and complete.
Give us a call if you think you need help navigating your way through the new system!