Real Time Information
HMRC are planning to introduce significant changes to the way in which PAYE information is submitted to HMRC.Currently employers send details of employees pay, tax and national insurance deductions at the end of the tax year (forms P35 and P14). The deadline for the submission of this year’s forms is 19 May 2011. There are penalties, which apply to broadly all employers, for failing to submit the forms on time and electronically, so please get in touch if you require any help in this area. HMRC are planning to introduce Real Time Information (RTI) a system of monthly/weekly PAYE returns which would replace the annual end of year forms. As detailed in the HMRC consultation document: ‘RTI will collect information about tax and other deductions automatically each time employers run their payroll. This information will be submitted automatically to HMRC at the same time the employees are paid. Where employers pay their employees via BACS, the RTI data will form part of the BACS submission.’ HMRC hope that this change to the system should mean that employees pay the right amount of tax and are paid the correct amount of state benefits where appropriate. Following a consultation by HMRC, it has been confirmed that a pilot scheme will run from April 2012. The introduction of the scheme will be phased in and it is expected that all employers will move to RTI by October 2013. Large employers will be expected to use the system from April 2013. The start date is slightly later than had been originally announced following a consultation with interested parties. If you would like further information or guidance on payroll issues please do get in touch.