HM Revenue and Customs (HMRC) is advising employers to get ready to move to the new way of reporting Pay As You Earn (PAYE), which takes effect from 6 April.
Under the new system, employers will be required to move to a new way of reporting PAYE called Real Time Information (RTI), where they report each time they pay employees, rather than annually. This updates the PAYE system so that it is quicker, easier and more accurate.
Following the introduction of RTI, employers are set to benefit from much simpler requirements for reporting to HMRC and the abolition of the extensive annual tax return that the old system required.
RTI will also bring benefits for employees, particularly people with multiple jobs, as HMRC starts to get details of their tax every time their wages are paid, rather than just once a year. This will make HMRC's records more accurate and will begin to reduce the number of cases where someone is found to have under or overpaid tax during the year.
For the vast majority of employers, the first real time return will be the first employee payday on or after 6 April 2013. HMRC is advising employers to visit its website at
www.hmrc.gov.uk/rti for comprehensive information about RTI, including how to prepare, payroll software options and tips.
Employers are also advised to acquire new or updated software. They will need to talk to their payroll software provider or payroll service-provider (and their Bacs software or solution supplier if they pay via Bacs). They also need to start checking and updating employee information. It is vital that the information employers have about their employees is up to date.
HMRC is offering a range of help for businesses to prepare for the change, including free software for employers with nine or fewer staff members, targeted flyers and emails, regular live Twitter Q&As, YouTube videos and roadshows nationwide.
