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RTI Is Coming… Are You Ready For It?

Written by Tania

The move to reporting PAYE information online to HMRC in REAL TIME is mandatory. Most employers will have to move to operating RTI (Real Time Information) from April 2013. In October 2012, HMRC will write to all employers telling them what they need to do to get ready for RTI, and in February 2013 they will confirm the date from which each employer should start reporting their PAYE information in real time. From their given date, all employers must report payroll information to HMRC on or before every payday instead of after the end of the tax year. These reports will be made online using payroll software, and must include all employees, so there are some things you must now consider:

Does your payroll software allow you to submit PAYE information in real time?

If not, you must look at updating your payroll software as soon as possible or change to a software package that can. Alternatively you may want to consider getting a payroll bureau to do the reporting for you.

Is your employee data complete and correct?

It is essential that you have accurate employee data, so before starting to use RTI you must check that the data you hold in your payroll records is complete and accurate: Full name, date of birth, National Insurance number, gender and address.

Do you pay your employees by BACS?

Employers making payments to their employees by BACS, using their own service user number, will need to include a cross-reference in the RTI data submission and their BACS payment instruction.

To keep up to date on any RTI developments go to www.hmrc.gov.uk/rti

The National Minimum Wage October 2012

Written by Tania

The national minimum wage (NMW) is the set minimum hourly rate that UK employers must pay their workers. There are three aged based rates and an apprentice rate which are usually updated in October each year.

Almost all workers who work in the UK are entitled to the NMW, except self-employed people and children who are still of compulsory school age.

The rates from October 2012 are as follows:

Adult Rate (21 and over): Increase of 11 pence to £6.19 an hour
The 18-20 year olds rate will remain at £4.98 an hour
The 16-17 year olds rate will remain at £3.68 an hour
The apprentice rate: Increase of 5 pence to £2.65 an hour

HMRC enforces the national minimum wage and if they find you have underpaid the NMW they will issue a notice of underpayment showing the arrears you must pay to your workers and possible penalties you must pay HMRC.

Does your payroll software flag up when employees rates are due to be reviewed? Check your employees’ ages and make sure you increase their hourly rates when applicable.

10 Great Reason For Outsourcing Your Payroll

Written by Tania

COST

Big businesses can afford to maintain big payroll departments. For small businesses however, an in-house payroll service is a money burner. If you calculate the hours your employees spend on payroll-related activities, plus payroll software costs, training costs, printers, printing and distributing payslips, creating tax documents etc, you could be surprised by the result when you compare that amount to the cost a payroll service provider can offer.

RESOURCES

The payroll function can consume a large proportion of your staff resources, especially if the staff in charge of the payroll are not trained specifically to deal with it or have the payroll function as a smaller part of their overall responsibilities. The benefits of outsourcing the payroll include freeing up these resources allowing your staff to concentrate on more essential tasks. You may even be able to reduce your staff’s size. Outsourced functions also give you better scope for expansion of your company with scalable services suited to your business.

TRAINING

It can often be expensive to employ staff with the necessary training to operate a payroll system. For smaller companies where the payroll role is not enough to warrant a full-time employee, you may have to use your current staff to train in payroll as an additional responsibility to their core role. Your payroll staff will also need to keep up to date with the latest tax procedures and legislation.

Real Time Information: An Introduction

Written by Tania

By now you would surely have heard about Real Time Information (RTI), the completely new system of reporting PAYE to HMRC. Starting from April 2013, under RTI, employers will submit information about PAYE payments to HMRC online throughout the year, rather than at the end of the year. Every time you process your payroll, your software will collect the necessary information and send it to HMRC online on or before each actual pay day. All required information must be complete, accurate and up to date.

The concept is to:

make the PAYE process simpler and less burdensome for employers and HMRC
simplify the employee starting and leaving processes
make PAYE more accurate for employees, eventually reducing the number of bills and repayments sent after the end of the tax year
enable HMRC to pursue late payments more effectively
support the payment of Universal Credits
reduce Tax Credits errors and frauds

Paye Late Filing Penalties

Written by Tania

HMRC have addressed the concerns about the delay in informing employers of late PAYE end of year returns and subsequent penalties. In previous years, employers who did not file their annual P35 return by 19 May incurred penalties of £100 per 50 or fewer employees for each month that their return was late. In some cases, employers were unaware there returns were late until they received a first penalty letter in September covering 4 months worth of accrual penalties.

HMRC have now announced a number of agreed measures to deal with this problem:

HMRC will change the date of the ‘Notification to complete form P35 Employer Annual Return’ from mid February to mid March, so that employers will receive it much nearer to the end of the tax year.
From 28 April 2012, where HMRC believe a 2011/12 P35 remains outstanding, they will issue an ‘Employer Annual Return Reminder’.
From 31 May, HMRC will introduce a ‘P35 Interim Penalty Letter’ which will reach employers within a month of the filing deadline. The letter will state that the employer has incurred a late return penalty and explain what to do to avoid it increasing.

Together with improved online guidance for submitting P35s, these measures should help employers to avoid incurring unnecessary penalties and significantly reduce the number of cases where penalties in excess of £100 are charged.