PAYE Changes For Employers in York and North Yorkshire
5:01am 7th April 2013
The way employers in York and North Yorkshire process their payroll is changing from today.
"Real Time Information" means employers have to submit information throughout the year rather than just at the end of the tax year.
Accountant Lorraine Young from Garbutt and Elliott has produced this quick guide which covers what you need to know about what she calls 'the biggest change in the PAYE system since its introduction in 1944':
With Real Time Information (RTI) coming into effect on April 6 2013, employers need to know they have everything in place. It is essential that employers are prepared well in advance to avoid any penalties that may arise out of a failure to properly comply with the requirements of RTI.
1) What is happening?
Under RTI, information about income tax, National Insurance Contributions (NICs) and other deductions due under PAYE must be submitted throughout the year as part of the payroll process, rather than at the end of the year as they are now. The 2012-13 payroll information should be submitted as normal. Every time the payroll is processed, the PAYE software will collect the necessary information and send it to HMRC online ‘on or before’ the pay date.
2) Who is affected?
All employers. Every employer must ask themselves whether they are absolutely sure that they have put the necessary changes in place to ensure compliance with the new regulations.
3) What do HMRC need?
HMRC will no longer require the end-of-year Employer Annual Return forms P35 and P14 and they will no longer require submission of forms P45 or P46. Instead, the information will be reported in real time.
4) How strict is the deadline?
Although the implementation of RTI has been described as a staged process, almost all employers and pension providers will be required to operate RTI from April 6 2013, with very few exceptions.
5) Are there any exemptions?
Large employers with schemes of 5,000 or more individuals may defer implementing RTI, if they have not been able to get their systems in order but this only by agreement with HMRC, who will agree a later implementation date. However, this cannot be later than October 2013 as this is the start date for Universal Credits.
There are a small number of other non-standard PAYE schemes that will continue to use existing paper arrangements until April 2014. These are employers with religious objections to electronic communications and users of the special schemes for examination fees, electoral payments, direct payment and direct collection schemes (where an employee reports their own PAYE).
6) What are the penalties for non-compliance?
HMRC haven’t yet announced details about the nature of the penalties for non-compliance, however they have said that there will be penalties for those who don’t follow the correct procedure.
7) Is there any help out there?
HMRC recommend using a payroll service provider like Garbutt & Elliott’s payroll team to take the stress out of complying with this complicated new legislation. By outsourcing your payroll to our in-house payroll team, we can offer you peace of mind, and help and support to guarantee complete RTI compliance. Using our specialist software we will ensure that all the correct information is submitted to HMRC on your behalf, alongside efficiently processing your weekly or monthly payrolls, making sure your staff are paid correctly and on time.
This article has been written by Lorraine Young of Yorkshire accountants Garbutt & Elliott, who have offices in York and Leeds. Lorraine can be contacted by email firstname.lastname@example.org or on 01904 464100.
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