At the end of the 2012/13 tax year, HM Revenue & Customs is going to change the way in which employers and payroll bureaus operate PAYE, and if you use UK Payroll Software to handle your payroll, it really helps if you are ready for the change as early as possible. This guide explains the update and how to ensure the transition is a smooth and simple one.
The Real Time Information Update
Currently, employers who operate PAYE must submit PAYE information at the end of the tax year, but from April 2013 PAYE information must be submitted every time an employee is paid, including employees paid under the NIC lower earnings limit. This is the Full Payment Submission (FPS), and the frequency at which employees are paid doesn’t matter – it could be weekly, bi-weekly, monthly… – whenever an employee is paid, an FPS must be submitted.
The first Full Payment Submission will occur on the first payday after the 5th of April 2013. For this submission you must include details of every member of staff regardless of whether they have been paid in that payroll run. Every subsequent submission will include details of the paid employees only.
The FPS will include the amount paid to the employee over the relevant time period, deductions such as National Insurance and Income Tax, and information for new employees or employees who have left. The system aims to makes things simpler – you will no longer have to complete the Employer Annual Return (P35) or the End of Year Summary (P14), and starter and leaver information means you will also no longer have to send P45 or P46 forms.
Payroll Software RTI Solutions
If you use a payroll service, RTI compatibility means you can make the transition early and get used to the operational process, which is most important for larger businesses and payroll bureaus, but still highly advantageous for businesses of all sizes. Companies registered before 5th November may opt out of RTI, and so may companies who are exempt from online filing.
Given the significance of this update, it will not be a surprise to see teething problems with every major software provider and payroll service bureau, but with the best RTI payroll software provider the problems should be minimal, and steps should be provided to solve any issues as they arise.
For larger businesses and payroll bureaus, the transition to RTI will be made smoother and easier with the right preparations and procedural considerations. The earlier you begin to prepare for the changes, the better your software will help you adapt to the change and the smoother the process will be for you and your clients and/or employees. You can find information on how to prepare for payroll using software at the HMRC RTI PAYE information page.
Buy UK RTI payroll software that will be ready for RTI as soon as it comes into effect and keep up with the RTI changes.