TT182: RTI – Are You Ready for the Revolution?
On 6 April 2013 the new PAYE Real Time Information (RTI) system will be introduced which will revolutionise the way in which employment taxes are accounted for to HMRC.
In place of year end reporting (forms P35 etc.) employers will report payroll information to HMRC each time payments are made to employees. This report is called a ‘Full Payment Submission’ report (FPS) and it must be submitted on or before the date payments are made to employees.
If there are any adjustments to be made to the amount due to HMRC included on the FPS (e.g. Construction Industry tax deductions) then an ‘Employer Payment Submission’ report (EPS) must be submitted on or before the payment is made to HMRC. Failure to do this will mean that HMRC will seek to collect the tax/NIC’s due per the FPS even though the actual amount due may be lower.
Some employers must submit an ‘Employee Alignment Submission’ report (EAS) before any submissions can be made to HMRC. This report enables HMRC to check the employer’s employee data against records held by HMRC. HMRC will then send details of any discrepancies to the employer. This must be done if:
- the employer with more than 250 employees; or
- the employer has two or more payroll systems i.e. monthly and weekly; or
- it is not possible to make a single FPS each month.
To be ready for RTI employers need to do the following:
- Contact their payroll software provider to ensure they can make online RTI submissions;
- Ensure they are registered for PAYE Online;
- Complete the EAS where applicable or otherwise verify employee information, in particular, ensuring that each employee’s full name, address and national insurance number are correct.
Barnes Roffe enrolled payroll clients in the RTI pilot scheme last November. This has been a success with payrolls being submitted almost without amendment. The key to a smooth transition to RTI is verifying that employee data is correct before any payroll submissions are made to HMRC.
If you require any assistance then please contact your Barnes Roffe partner or Paul Hughes (firstname.lastname@example.org or 020 8988 6133).Talk to Barnes Roffe today