By Neilson Watts (Associate Product Manager for Sage One Payroll).
I’ve been involved with payroll for many years now…even before I worked for Sage I was helping to run a payroll in a small business and I feel there is a lot of unnecessary scaremongering going on out there about Real Time Information (RTI).
The fundamentals of running a payroll are the same!
Yes for most businesses in the UK you will need to start making RTI returns from April 2013 but if you take a step back, all RTI is really about is sending information to HMRC more regularly (i.e. every time you make a payment to an employee).
Under RTI you will still continue to deduct tax and national insurance as you do today. You will also continue to make the payment of any outstanding PAYE & NIC liability to HMRC by the 19th of the next calendar month (22nd if you pay electronically).
Any employees who leave your company will still be issued a P45 so that they can take it to their next employer and you should still accept a P45 if a new employee starts with you.
So what is changing in RTI?
You will need to submit what is called a Full Payment Submission (FPS) to HMRC every time you make a payment to an employee but this should be different to sending your payroll year end returns electronically today. HMRC will know from the FPS what your outstanding PAYE and NIC liability is.
For anybody that leaves your business, the good news is that you don’t need to submit a P45 electronically to HMRC. Anybody that starts with you, again you will no longer need to submit a P45/P46 to HMRC – both of these will be catered for as part of your regular Full Payment Submission.
If you need to make HMRC aware of any change to the outstanding PAYE and NIC liability (for example if you are reclaiming Statutory Sick Pay or Maternity Pay you will need to submit what is called an Employer Payment Summary (or EPS for short).
Do I still have to do a Payroll Year End?
Again some great news about RTI is that you will no longer need to submit a P35 Annual Return or employee P14 End of Year Summary to HMRC as these will be taken care of in the FPS and EPS submissions. You will still need to provide your employees with a copy of their P60 End of Year Certificate.
What are the potential fines under RTI?
HMRC recently confirmed their guidance for late and inaccurate returns submitted under Real Time Information (RTI). The good news is that the HMRC appear to be taking a lenient approach.
For late submission or payments:
- HMRC will not issuing late penalties for Full Payment Submissions until April 2014.
- There will be no automated late payment of PAYE & NIC liability penalties until 2014. The current penalty process will remain in play until then.
- For the tax year 2012-13, HMRC will not charge penalties for inaccuracies identified on in-year Full Payment Submission. But penalties may be charged after the end of the tax year, based on the final Full Payment Submission for the year.
- For the 2013-14 tax year if inaccuracies appear on Full Payment Submissions, in year penalties may apply. The HMRC will use the same considerations as now to identify employers for compliance visits.
Let Sage One Payroll software make RTI easy for you
Any good reputable payroll software provider should be making the move to RTI easy for you. We’re so confident about how simple we’ve made RTI in Sage One Payroll you won’t need any training, you don’t need to install anything, we’ll let you know what you need to do and when. Underpinning all of this is the fact that we provide you with 24/7 Customer Support just in case you have any problems or queries. Can it get any easier and reassuring?
I love Sage One Payroll and once you’ve tried it and seen how simple it is…I think you will too!
(Download our FREE ‘5 Step Guide to Payroll Love’ to get your started).