Monthly Archives: February 2013

Getting ready for RTI

In just over a month the biggest shake up of the PAYE system, the introduction of Real Time Information (RTI), will be upon us. For the vast majority of employers RTI is going to be compulsory from 6 April 2013.  To make the transition as smooth as possible there are 3 questions you should be asking yourself now:

1.  Is my payroll software / provider RTI ready?

Under RTI HMRC’s Basic PAYE Tools software will only be suitable for employees who are likely to have no more than 9 employees in total (including starters during the tax year).  This may mean that if you have previously used this free resource you need to consider purchasing payroll software for the first time, or even outsourcing your payroll function completely.

If you currently use payroll software, then is it going to be upgraded to handle RTI for you?  Do check with your provider that their package is RTI ready.  Similarly if you currently use a payroll bureau, service provider or agent then talk to them now about how RTI will change the service they provide to you and if you’re not happy then shop around for an alternative.

2.  Is the employee data I hold accurate & up to date?

As part of the RTI process key pieces of employee information are submitted to HMRC via a report known as a Full Payment Submission (FPS), and by an initial Employer Alignment Submission (EAS) for larger employers, which are then checked against HMRC records.  These include:

  • Employee surname & forenames (this must an employee’s full name, no initials or common names must be used)
  • Employee date of birth (this should accurate, software default dates should not be used)
  • Employee National Insurance number (this must be accurate, temporary NI numbers, eg. TN845491F will not be acceptable)
  • Employee address (it is worth checking with employees that the address you hold is up to date)
  • Employee contracted hours. You must select the number of hours your employee is contracted to work from one of the following bands of weekly hours:
  1. Up to 15.99 hours
  2. 10 to 29.99 hours
  3. 30 hours or more
  4. Other

3.  Do I need to review my payroll procedures and / or train staff?

For example you may need to design new employee starter forms to capture the new data items needed for RTI submissions such as the employee contracted hours.  You may need to set up a system to make sure payments made to casual / occasional workers are recorded as under RTI it becomes compulsory to complete employee information and report payments for such workers even if they are paid below the National Insurance Lower Earning Limit (LEL).

Do you need to train HR / Payroll staff to make sure they are aware of the impact of RTI?  Once RTI is bedded in penalties will be raised by HMRC for late or inaccurate submissions.

OUR SUMMARY

By being prepared now you can ensure that the switch to RTI is as painless as possible and by ensuring that the data you will be sending to HMRC is as accurate as possible you are likely to significantly reduce the risk of triggering any HMRC investigation of your PAYE records.

If you would like further information or advice regarding RTI, then do please get in touch.  Having successfully joined HMRC’s RTI pilot we are well placed to help.  Alternatively if you feel now would be a good time to look at outsourcing your payroll function then we can offer a cost effective solution.

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Introducing Tax E-News

Introducing Tax E-News

Every month we publish a helpful Tax E-News bulletin via our website.  As an example February’s hot topics include:

  • 10% tax write-off on machinery, furniture and equipment purchases
  • Option for small businesses to be taxed on cash received less cash spent
  • Using your home for business
  • Operating as a limited company but wished you didn’t?
  • Car leasing
  • Low emission cars

Each article is designed to give a brief outline of the latest tax issues and how they might affect businesses and individuals.  With a dedicated Tax Manager on our team we are then well placed to provide further information and advice to help our clients assess any new tax opportunities and look carefully to see if they might benefit them.  This is part of our proactive approach.

To read February’s Tax E-News, click here.  To keep up to date with what can be a fast moving tax environment you might like to check back each month for the latest bulletin.

If your financial year end date is 31 March 2013 maybe now is the time for a pre year end review and some prudent tax planning?  Call in to see us or make an appointment to see how we can help you make the best of your financial position.

Feb / March Tax Diary

19 February PAYE, Student Loan &   NIC deductions for the month ending 5 February due for payment to HMRC (due   22 Feb if you pay electronically.
19 February CIS return and tax   due for month ending 5 March (tax due 22 Feb if you pay electronically)
28 February Surcharge of 5% on   any 2011/2012 self assessment tax outstanding for payment to HMRC (was due for   payment by 31/1/13).
1 March Corporation tax for   year to 31/5/12 due.
19 March PAYE & NIC   deductions for the month ending 5 March due for payment to HMRC (due 22 March   if you pay electronically).
19 March CIS return and tax   due for month ending 5 March (tax due 22 Feb if you pay electronically)