As most businesses will now be aware HMRC are bringing in a new way of filing and reporting PAYE. this will commence from April 2013. This is called Real Time Information or more commonly RTI. As an employer this could affect you in a number of ways. We have outlined the basic information that you need to know.
It is imperative that the correct data for new employees is collected. This includes the Name, Address, Date of Birth and NI number. In addition to this, HMRC require us to collect employee passport numbers. This is to help them identify employees correctly. We use an employee form which contains all of the information we need to collect.
As part of the process, it is also highly important that the data held for current employees is up to date and correct. We would advise you to ask your employees to check that the details on their payslips are correct and also to provide their current address. If they have moved in the last year or so and haven’t informed HMRC they will also need to do this asap. They can do this by visiting the following link: https://www.hmrc.gov.uk/report-
One of the reasons that HMRC are making this move to RTI, is to feed the information into what will become the Universal Credit scheme. Universal credit will replace benefits such as Tax Credits and job seekers allowance. As part of the Universal Credit scheme, HMRC will need to know each employees weekly working hours, these will be banded into 3 categories:
- up to 15.99 hours
- 16 to 29.99 hours
- 30 hours or more
- other
HMRC will require all paid staff to no be reported through the payroll, therefore, if you pay temporary or casual staff that are currently not paid through the payroll, they will now be required to be reported though the weekly/monthly payroll, this may mean that you need to provide me with their personal data. Please feel free to contact me if you have any further questions regarding casual staff.
One area that will affect employers the greatest is that the payroll information will be submitted to HMRC every time the payroll is processed. This means that all the correct information will be required before the payroll is processed, it will not be possible to change an employees hours after the RTI information has been submitted. Any alterations to the payroll, will need to be made in the next payroll run.
Further to the above paragraph, it will not be possible to process a new member of staff until all of their personal details as mentioned above are received. HMRC will reject the information if it is incomplete and possibly issue penalties. Therefore, we would advise that you warn your new employees that they will not receive payment unless they provide all of the required information. This includes a completed P46 if they do not have a current P45. We can provide a P46 if required.
We have highlighted the things you need to do now in bold as these are steps we need to take now in order to move over to RTI as smoothly as possible.
If you have any questions regarding RTI, whether a client or not, please feel free to ask. As a client, you will not need to worry about the reporting to HMRC as this is something we can do each time your payroll is processed. As the employer, your responsibility is to ensure that the employee data is accurate.
PAH Accounting use our sister company SW Payroll to provide all of its payroll services. Please feel free to contact Zara Radford on Zara@PAHaccounting.com for further information.