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Sage One Blog

Sage One news, tips and advice for start-ups and small businesses.

How are casual, seasonal and temporary employees affected by RTI?

Neilson WattsBy Neilson Watts (Associate Product Manager, Sage One UK).

Like Europe’s 1986 smash hit ‘The Final Countdown’, time is slipping away and we are counting down to the introduction of PAYE Real Time Information (RTI) from 6th April 2013.

For the majority of small businesses who probably thinking “RTI? What, when, how, etc?” you can read my previous blog nicely entitled ‘What is Real Time Information (RTI) for Payroll / PAYE?

Should I treat casual, seasonal or temporary workers differently?

A lot of businesses don’t necessarily include temporary, seasonal or casual workers in their payroll particularly as they only be employed for a very short period of time and often earn below the tax and NI thresholds.  Currently you may be including them as either a P38(A) Employers Supplementary Return or a P38(S) for Student Employees who work for you only during a holiday.

Under RTI however, the P38(A) and P38(S) process will no longer be in place, you will be expected to included them as an employee in your payroll and submit information to HMRC every time an employee is paid…this submission is called the Full Payment Submission.

What should I do if I take on a new casual, seasonal or temporary employee?

It’s straightforward, treat them exactly as you would a full time employee, accepting any P45 the employee brings from a previous employment.  If the employee does not bring a P45 treat them through the P46 New Starter Declaration process.

From 6th April 2013 you will no longer need to submit the P45 or P46 to HMRC, the new starter information will be included as part of the Full Payment Submission sent to HMRC on or before the employee is paid…..Sage One Payroll will help you do this effortlessly.

What happens if the casual, seasonal or temporary employee is not being paid?

Under RTI, HMRC want to know whether an employee is receiving a payment or not.  If the HMRC do not receive a Full Payment submission for an employee within a period of 3 months, they will assume the employee is no longer working for the business and will close their employment record.

With RTI there is a requirement to indicate whether an employee is irregularly paid by including an “irregular payment indicator” within Full Payment Submission.  Once the employee is then due to be paid you no longer need to include the “irregular payment indicator”.

Using Sage One Payroll it’s as simple as just ticking the “Do not pay” checkbox and we automatically will include the “irregular payment indicator” in the Full Payment Submission (FPS).

What should I do if the casual, seasonal or temporary employee leaves the business?

Again this is straightforward, treat them exactly as you would a full time employee.  You will need to ensure they have received their last payment and ensure they have been marked as a leaver.

Like the starter process, you will no longer required to submit a P45 to HMRC, the leaver information will be included on their final Full Payment Submission which will inform HMRC they are no longer working for the business.  Sage One Payroll will handle this for you automatically.

You should continue to provide the employee with a paper copy of their P45 so they can take that to their next employment.

Will this mean I might need to look at the costs of my payroll?

The great news with Sage One Payroll (available to subscribe to in 5, 10 and 15 employee variants) is that your employee licence count is for those who are still in employment with you.

This means that even if you have a high turnover of staff, you can be reassured that leavers will still be retained in the software but not be included in your live employee count.  You’ve also got the flexibility to seamlessly change your subscription up or down the 5, 10 or 15 employee variants and we will change the billing automatically without needing to contact Sage.

With Sage One Payroll we guarantee that you will be RTI compliant and that we have a brilliantly simple RTI experience so why not sign up to a FREE 30 day trial today?

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