Accounting Blog

Real Time PAYE Starts in April 2013 – Important Information

Real Time PAYE Starts in April 2013 – Important Information

The stressful Year End process of P35 and P14 submission will disappear starting from 6th April 2013, replaced with a submission to HM Revenue & Customs each time your business pays its employees.

This is called Real Time Information, or RTI, and it will mean some changes to how you process your payroll.  We’ve put together this bite size guide to inform you of the new system, and to answer some common questions.

What doesn’t change under RTI?

PAYE stays the same – using tax codes, deducting tax and National Insurance and calculating pay all works in the same way it does now.

How you tell HMRC is changing, not what you are telling them about.

Coding notices, messages from HMRC, when you pay HMRC, P60s and P11s will all operate in the same way they do now, as does reporting a change to HMRC (such as a change in name or address).

What does change?

How employers (or accountants/agents) tell HMRC about the pay and deductions they have made.  When RTI starts, you will have to send HMRC a Full Payment Submission (FPS) that reports the tax, NICs and other deductions on or before the payroll for that period is run.

This information will be collected automatically by the payroll software used to submit the returns, this is sent to HMRC electronically.

Forms P35, P14 and P38a are no longer required – instead of a full year end submission, you just inform HMRC that you are processing your final payroll run for the tax year as it is processed.

RTI will be a more rigid PAYE system for everyone, once weekly or monthly submissions have been made to HMRC this will form part of your PAYE record for the tax year and should not be amended at a later date.

More information regarding RTI can be found on the HMRC website at the following link;

https://www.hmrc.gov.uk/payerti/getting-started/index.htm

If you have any queries about the new system or the new tax year beginning on 6th April 2013 please do not hesitate to contact us.

Best regards

Primus Accountancy

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