HMRC are set to change the way PAYE is reported to the Revenue, replacing the Employers Annual Return with the submission of ‘Real Time’ information every time payment is made to employees.
The submission of Real Time Information will involve the collation of payroll details for each pay period and the online transmission of this data to the Revenue as part of the payment process, whether weekly, fortnightly, four weekly or monthly.
The details will include those currently submitted via the end of year P35/P14 forms together with up to 100 other items of information including passport numbers for foreign workers, hours worked, tax free payments and payments made to casual workers for whom a P46 is held.
It is planned that all submissions will be made via the BACS system with the interim option of the Government Gateway for the present time.
HMRC are currently in negotiation with the banks and software developers with the schedule for implementation to start in April 2012 and be complete by October 2013 for all employers.
According to the Revenue the reasons for change are that better information will be available to them to allow the adjustment of tax codes using up to date income data and therefore tax deductions are more accurate. Processes should be improved as start and leave dates will be submitted with the payment file and costs to employers reduced as starters and leavers administration is simplified. This system will also give the Revenue full information on companies’ liabilities each month providing them with the tools to collect the correct amount of PAYE due each month.
The aim of the Revenue is to simplify the PAYE procedure but as the process moves forward there are concerns that this may actually do the reverse causing more problems and headaches for the employer. As a BACS Approved Bureau and with up to the minute payroll software DTE Payroll and Tax Centre is well prepared for the changes ahead.
If you have any questions on this issue please contact Lynne Cramb on 0161 767 1213 or email lcramb@dtegroup.com.
