Now that RTI is in it’s third month since going live, the reporting of PAYE in real time has highlighted to HMRC that some employers are not operating PAYE correctly. Employers must ensure that PAYE is calculated and reported according to their actual payment date: NOT the date the payroll is run and NOT the period end date the work was done by your employees. For example, if a monthly payroll is processed on 5th June for work period ending 31st May, but paid on 10th June, the full payment submission should give the payment date as 10th June, which falls in the tax month running 6th June to 5th July (i.e. tax month 3).
One effect of misaligning is that deductions of tax and NIC from a payment made to an employee may be attributed to the wrong tax month and possibly even a wrong tax year. To address the issues HMRC have published guidance, which can be found here. This sets out steps to be taken and provides guidance in circumstances where an employer decides to change the date employees are paid in order to eliminate the misalignment.
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