By Rachel Andrews - 6 February 2013
This year, all businesses – starting with the smallest first, in April - will be have to change the way they report PAYE. The Forum of Private Business has been working with HMRC on their Real Time Information (RTI) programme. Rachel Andrews, Financial Director of Andrews Computer Services and the Forum's adviser on payroll issues, is one of the small businesses taking part in the pilot of RTI. This is the third of her fortnightly blogs ahead of the introduction of this fundamental change.
In my last blog I covered the types of submission businesses could make under RTI. This time around I have covered how to set up to submit returns online. Be prepared and act now to avoid the rush in April!
RTI becomes mandatory for employers between April 2013 and October 2013. This migration period will be phased and HMRC will notify you 4-6 weeks before you are required to begin making RTI submissions. All employers will be using the RTI service by October 2013.
If you’ve not previously submitted on line you will need to register with the Government Gateway and activate the PAYE for Employers Service. To do this, visit www.hmrc.gov.uk, click Register (new users) and follow the on screen instructions. You will need your PAYE reference, and your Payment Reference handy before you start.
Once this is completed you should check your e-Submission settings within your software. Sage’s payroll stores these is a file on the system, so they only need to be entered once into the system – set it and forget it!
There are two tabs on the screen and the system won’t let you out unless you have completed both. The first page stores the Gateway User ID, Password, Company Name, Tax District/Reference and optional tick boxes, such are keeping a log of each time you submit, and automatically checking for new messages when you open the menu. (I recommend you do NOT tick that option as it means the system will be very slow to access because it checks on the Internet every time you click on the option, which can tie up the PC for ages – especially if you clicked on the option by mistake!)
The second screen requires your personal details, such as your name and email address, so that the system can email you a confirmation when you submit data.
Using the RTI system, points to note.
One of the warnings that you are given about RTI is that you will now have to have ALL employees on your payroll, including students and occasional staff. If you have 5 permanent members of staff and a handful of casual people or students that work from time to time, you may find that you have not purchased a software license for enough employees. For example Sage Instant Payroll will allow up to 10 employees and the difference in price between Instant and the Sage Payroll where the next break for employees is 50 is quite a jump. So you will need to check this very carefully and find out from your software supplier what the options are.
Preparation now is time well invested, and if you find you cannot get what you want from your current supplier now is the time to change to a new system and invest in training on it, before going live in April. Help is available now but I expect in April it will be completely manic with so many companies having to join the scheme with very little notice. Forewarned is forearmed.
Also, HMRC obtained a commitment from the banks back at the start of the process that this new submission method would not be charged onto customers. The banks agreed to cover half the cost and the HMRC the other half. Do not be persuaded that you need to spend lots of money on new banking software, this is not what their agreement with HMRC states.
HMRC has already written to all employers about RTI and will follow up with a second letter this month, outlining the steps they need to take to be RTI ready. If you have questions about the new Real Time Information programme, Rachel is happy to answer them. Email us at email@example.com.
Rachel Andrews is a founder director of Andrews Computer Services Ltd, established in 1986. She has worked with Sage software since 1987. She specialises in accounts and payroll systems, project manages upgrades and restructuring of corporate systems for small and medium sized business.
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