The real time information (RTI) system for submitting PAYE information to HMRC must be used by small employers from April 2013. However, there has recently been a temporary RTI relaxation of one of the reporting requirements for employers with fewer than 50 employees.
From April 2013, employers will be required to submit information to HMRC regarding employee pay and deductions each time a payment is made. The aim of this system is to ensure employees pay the correct amount of tax throughout the year.
However, through the latest RTI relaxation, if you have less than 50 employees, and you pay some employees more frequently than once a month, you can send your RTI report known as full payment submission (FPS), to HMRC when you run your monthly payroll and not every time you pay an employee.
There are certain conditions which need to be met:
• The payroll run must be made before the end of the tax month, i.e. by 5 May for employees paid in April; and
• The relaxation only applies for RTI reports submitted up until 5 October 2013.
Remember, this is not a postponement of RTI, it is a small and temporary change to one reporting rule. You still need to use new or updated payroll software to report payroll data under RTI for all pay dates on or after 6 April 2013.
What do I need to do?
HMRC advises all businesses to do one of the following as soon as possible:
• get payroll software if you don’t already have any
• update your existing payroll software to a version with this functionality
• use a payroll provider (such as an accountant or payroll bureau) to do the reporting for you
Obviously, you also need to make sure that all employee data is complete and accurate and you must also register for PAYE Online.
You should seek information about whether the RTI system will affect your business more widely; you may need to change some of your procedures, and provide more information.
Contact us for more information and advice on RTI and the recent RTI relaxation on 020 8780 2349.
This blog is a general summary. It should not replace professional advice tailored to your specific circumstances.