RTI and what it means for you – Part IV

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 first pilot of RTI. This is the fourth of her fortnightly blogs leading towards the introduction of this fundamental change – you can read them all at www.fpb.org/RTI. RTI becomes mandatory for employers during the period April 2013 to October 2013. This migration period will start with the smallest businesses so all micro, small and medium companies will be enrolled onto RTI from April 2013. The FPB campaigns for “Think Small First” and HMRC have embraced this for this change as their research showed businesses would like to have the change in one go, and not spread over time, so only the larger businesses will be phased in between April and 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. TIP – You will need your PAYE reference, and your payment reference handy before you start. There are a number of software suppliers that supply free payroll software for micro businesses, and the ones that are RTI compliant are listed on the HMRC website. If you do not have commercial payroll software you will no longer be able to use the HMRC’s free on-line software from April as the gateway will be too busy with submissions. The free Employers CD will have the basic payroll tools on it, but HMRC recommend that companies use either commercial software or one of the above free items. One issue that has cropped up since I have been on the pilot is that one of my PAYE payments processed through the payroll and submitted to the bank through my on-line payments system for some reason was picked up by their computers as being 2011 rather than 2012. So I received a phone call asking permission to credit the amount to my 2012-13 records, as they could see that it did not belong in 2011. This seems to have been a glitch with their systems, which hopefully will be ironed out by the end of the pilot phase. After all this is what this pilot is all about. Other than that I have continued to process my FPS (Full Payment Summary) as part of my payroll process, after sending the BACS file to the bank, which is effectively the payment being made, I submit the FPS. It is all rather simple and straight forward and no more difficult than submitting an in year form like a P45 (Leaver) or (New Starter) neither of which will be required after April 2013. So I am looking forward to this final year end, as from 2014 onwards the process will be really simple, and will just require printing the employees P60s, and the P35, loading the new parameters and updating any new tax codes. The payments should all have been reconciled month by month already and the final payment of PAYE should be the balance owed from Month 12 or the last quarter depending on how frequent the payments are made. HMRC has recently written again to all employers about RTI, 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 publicaffairs@fpb.org.
Real Time Information reporting became mandatory for all small and medium-sized business employers in April 2013. Does your business comply?
Rachel Andrews