Real time processing
From April 2013, employers must start submitting PAYE information to HMRC in real time. In other words, every time an employee is paid, HMRC must be notified of this immediately. Currently, HMRC is informed about what payments have been made to employees at the financial year end once the employers annual return is completed and submitted. RTI replaces the need to submit the annual return and instead forces the employer to submit during the year when each payment is made.
RTI affects all registered employers regardless of whether they are “director-only” companies or those that have additional full or part time employees. This means that even if a director takes a small salary each month a NIL return must be submitted to confirm this (previously nil returns could be done quarterly or even annually).
What does this mean to you our clients?
Don’t worry about anything as we will deal with all relevant submissions to HMRC as part of your normal service. Therefore, if we currently complete the payroll and submit annual returns to HMRC we will continue to do so using this new system (this includes all director only companies).
However, if you currently complete your own payroll or submit the employer annual return to HMRC then you will continue to do so unless you let us know in plenty of time.
In order for HMRC to align records they hold with the records that we currently hold we need to submit an “alignment” report to HMRC with the first submission in April. The contents of the report will include each employee’s (or directors) full name, date of birth, National Insurance number, gender and current home address. Although we should have the vast majority of this information we may need to contact you in the near future to update our records. We would appreciate if you could reply by return.
Late submission and penalties
Currently HMRC will not impose penalties for late submission of each monthly return until April 2014. However, HMRC can impose penalties if submission is inaccurate or does not tally up with the annual payment.
If you have any queries with RTI or how it will work within your business, feel free to speak to one of us and we would be happy to help.