Further to this article on the Real Time Information Initiative on the Artaius website, it is now highly likely that small employers will be required to submit information under RTI from April 2013. HM Revenue & Customs will be writing to employers 4-6 weeks before their mandatory joining date, with automatic penalties likely for non-compliance.
The HMRC pilot project is under way and working well, although there are some issues still to be resolved including;
- Employers who pay their staff in cash during the course of the month and then gross this up to account for the tax and National Insurance at a later date, such as restaurant and bar staff.
- Employees whose pay is under the National Insurance Lower Earnings Limit (£107 per week in 2012/13) do not have to be included on the payroll at present as no deductions are made; however they must be included on the payroll from the start of RTI. HMRC will provide guidance on how domestic employers without schemes already in place should deal with employees paid less than the Lower Earnings Limit, as they are not keen for lots of new PAYE schemes to be created.
- Data quality issues. Full and correct data must be held for each employee for RTI to work. Employers should ensure they have the correct name, address, date of birth and National Insurance number for their employees.
This means that employers should start preparing for the switchover now, rather than waiting for April. To find out more about how we can help you prepare for the changes, contact us directly on firstname.lastname@example.org