Why not contact us today?
Phone: 01730 893067
Mobile: 07740 874385
Email: info@lucreative.biz
What would you rather be doing?

Real Time Information – change to PAYE

31/10/2012

Which of these responses matches your approach to RTI, the new system for reporting pay, tax, National Insurance and other details to HMRC.?


(1)              It doesn’t affect me.  My company doesn’t employ anyone except me / I employ less than 5 people and haven’t been affected by new pensions legislation or the health & safety legislation / I only employ casual seasonal workers.

(2)              HMRC will write again at some point and explain what I have to do.

(3)              My accountant and/or payroll bureau will sort it out for me.

(4)              My software provider has it covered.

(5)              I’ll just do it manually to start with, key the figures in by hand, and see how it goes.

(6)              It’s ages off yet, I’ll worry about it later.

(7)              I’m fully up to speed on RTI. I know what it involves, I’ve checked my systems and my data, and I have an implementation plan.

(8)              RTI? Isn’t that the ‘Round the Island’ yacht race held every June around the Isle of Wight?

 

OK, so this is not a hard-sell article, and I’m not setting out to put the frighteners up you (even though it is Halloween today), but let’s just have a little look at each of those responses, and the implications.


(1)           
It doesn’t affect me.  My company doesn’t employ anyone except me / I employ less than 5 people  and haven’t been affected by new pensions legislation or the health & safety legislation / I only employ casual seasonal workers.

RTI or ‘Real Time Information’ will affect everyone who employs people, and every limited company which employs people (which most do, even if it only employs one director).  

If you make any payments to any workers, even if they’re just occasional or seasonal; even if they’re under the current tax and/or National Insurance payment thresholds; even if they’re students, then RTI will apply to you. 


(2)           
HMRC will write again at some point and explain what I have to do.

Yes, HMRC will keep you informed, but they’ll only tell you what they need from you, not necessarily the best way for you to go about it. You need to research your options for dealing with RTI, and take action in advance of the deadlines, otherwise you’ll just finish up in a mad, last-minute scramble which will probably cost you money one way or another.


(3)           
My accountant and/or payroll bureau will sort it out for me.

Your accountant or bureau may be able take RTI problems off your hands for you, but have you checked how they’re handling it, and what they’re going to charge?  I’ve spoken to a firm who have calculated the implications of handling RTI for all their clients, and concluded that the only economic way to provide an RTI services is to DOUBLE their payroll charges. 

Yes, DOUBLE!

Why? Because payroll is already a lot of faff, and is often offered as a loss-leader.  Providers will need new software, new procedures and possibly to employ additional staff to cope with the extra workload.  This and the problems and delays of data-checking by a third party mean it will just not be possible to hold prices.


(4)           
My software provider has it covered.

Most of the major software providers (Sage, Quickbooks, Iris etc) have updated their systems to deal with RTI, and this is fine if you’re a reasonably large company and have the resources to buy and install the new versions of the software.

However if you’re using an older version of a payroll system, then the chances are that it won’t be compatible with the requirements for online submission.  Yup, online submission.  Which leads us to:


(5)           
I’ll just do it manually to start with, key the figures in by hand, and see how it goes. 

You can’t. 

Nope. 

 There is no offline/paper/manual method for Real Time Information submission.


There is no on-line ‘portal’ for RTI submission


You have to do it through compatible payroll software.

All of it.

From the outset.

No exceptions. 

None. 

So what will you do if your business is not ‘computer heavy’ and you don’t spend much time on paperwork or online?  What if you’ve been running your payroll using the HMRC online calculators and a manual or Excel ‘Deductions Working Sheet’?

HMRC have provided some ‘basic PAYE Tools’ for download here

http://www.hmrc.gov.uk/payerti/getting-started/paye-tools.htm

BUT these are not necessarily compatible with every variation of operating system

AND

will only handle up to 9 employees. If you have more than 9 then you’ll need to buy compatible software, or use one of the other provider’s free compatible packages available through this page:

http://www.hmrc.gov.uk/softwaredevelopers/paye/rti-software-forms.htm

Good.  Leave that until the last minute then eh?


(6)           
It’s ages off yet, I’ll worry about it later.

Yeah, ok, that’s an approach.  The first RTI submissions are due in April 2013, directly after the end of the current financial year, with ALL submissions required through the new system by October 2013.  And it’s ‘smaller companies first’, not last.  Still relaxed?


(7)           
I’m fully up to speed on RTI.  I know what it involves.  I’ve checked my systems and my data, and I have an implementation plan.

Congratulations. You’ll know then that you’re required to collect, correct and maintain full name and address, National Insurance, tax code, payroll id and employment start and end dates, on all the people whom you employ (even casually)

You’ll know that you need to verify all the above data with HMRC when invited to do so, and that you’ll need to submit data about payments made to employees, and PAYE and National Insurance contribution deductions on the same cycle(s) as your payroll whether monthly, weekly or ad-hoc, or a mixture of all.

You’ll know that you need to submit information about adjustments to your PAYE and NIC liability before the relevant monthly or quarterly payment is due.

You’ll know that all your payroll needs to be up-to-date all the time, and you won’t be able to jiggle about with it as the year-end approaches.

You’ll know that P35/P14s and P38A will no longer be required, but that P45s, P60s will remain.

More information:

http://www.hmrc.gov.uk/payerti/


(8)           RTI? Isn’t that the ‘Round the Island’ yacht race held every June around the Isle of Wight?

Yes… it is…  And to be honest if you’ve were expecting pictures of yachts battling their way around The Needles but you’ve got this far, then you’re to be congratulated. What you’re probably looking for is this:

http://www.roundtheisland.org.uk

Next year’s race is Saturday June 1st 2013 by the way, and you’ll already be too late to get your HMRC ‘Real Time Information’ submissions sorted by then as the scheme will have already started.  Never mind, let’s just look at boats…

http://www.roundtheisland.org.uk/web/code/php/main_c.php?map=rir12a&ui=rir4&style=std&override=&section=multimedia&page=photolibrary2012

Lucreative Business Services Ltd, Company No. 8274956, Registered Office: Millbrook House, Mill Road, Liss, GU33 7BD