Changes to Payroll from 6th April 2013
HMRC are making one of the biggest changes to payroll in history by overhauling the PAYE system. From 6th April 2013, whenever you make a salary payment, irrespective of the amount, HMRC must be informed via a RTI submission.
The benefits that HMRC believe this will bring are:
- Employees having the correct amount of tax deducted
- HMRC knowing exactly how much tax is due each month rather than at the end of the tax year
- Cost savings for HMRC
In order to prepare for this change we have made significant investments in software and training.
How does this effect you?
If we currently operate a payroll scheme for your company and we prepare monthly payslips then you’ll see no change, we will submit the payroll information to HMRC and this will be a seamless transition for you.
If, on the other hand you are a director taking a salary up to the National Insurance threshold and previously we have prepared a salary summary at the start of the tax year then we are unable to provide this anymore. This is because HMRC must be advised each month of the salary that you take irrespective of whether this gives rise to a tax or NI liability or not.
What do we suggest?
We suggest a one off annual salary to be taken at the end of the tax year, preferably each March. If cash flow is an important issue for you then we can process a monthly payslip including the RTI submission at our normal payroll cost of £15pm for a single payslip. Our annual cost of administrating the payroll will be £100+vat.
If you or your employees are in receipt of child tax credits (shortly to be renamed as Universal credits) then the hours that you or your team work are important and we need to be advised of this. Failure to do this may result in the tax credits payments ceasing.
Correct data is critical as HMRC will be checking the submissions on a monthly basis and matching the payment records to your file. We therefore recommend you check that we have your up to date address on file and if recently married advise us of any name changes. Please note than names should not be abbreviated and shown in full as official records.
If you have any concerns or questions regarding PAYE Real time please contact one of the directors or Susan Norris, our payroll manager.