Time is running out to prepare for changes to PAYE system
There are only a few days left before the changes to employers’ PAYE payment systems comes into force, but the Forum for Private Business believes many employers are still not prepared for the switch.
From this Saturday, April 6, the Real Time Information (RTI) system will come into force, which requires employers to submit details of their employees’ pay and deductions to HMRC using payroll software every time they pay them.
This is the biggest overhaul to the PAYE tax system since it was introduced in the 1940s, and will affect everyone except mobile therapists or very small salons with no employees. While HMRC has promised to be lenient towards businesses that make mistakes with the new system, the Forum has warned that those who’ve not prepared for RTI could find themselves in trouble with the Revenue.
“It’s quite clear that there are businesses out there still not ready, even at this late stage. Even at this point, is that it’s still not too late to get on board for RTI – the ship has not sailed,” said the group’s head of policy, Alex Jackman.
The Forum’s financial specialist, Rachel Andrews, has been working on an RTI pilot scheme for the last two years. “If I had any last minute advice for businesses it would be to have everything you need ready to go. So employee addresses, date of birth, and the correct NI number,” she said. “The date of birth is more important now than previously, it has to be correct.”
Andrews added that it’s crucial to have the correct NI number, and business owners can check a number’s authenticity by submitting a validation request with HMRC.
Salons or spas that pay staff weekly will granted some temporary concession from RTI. Until October they only need to submit payroll details monthly, although they will still need the specific RTI software to do this. From October they will then have to submit the details in real time.