Payday can always be a busy time for the smaller employer. That time of the week or month when employees are expecting prompt payment for their efforts can mean that other tasks – like actually making money for the company – can slip, which is not good for business.
Now however, HMRC have announced that they intend to make life a little easier for the finance department, or even just the managing director who wears several hats, by relaxing the reporting requirements for Real Time Information (RTI), which is part of the normal payroll procedure. Currently the rules state that payments to employees should be reported on or before the amount is paid to the employee. This has meant additional administration duties for small employers who have to pay employees weekly, or even more frequently, but only process the payroll on a monthly basis.
From now until 5 October 2013, a temporary relaxation has been introduced whereby employers with less than 50 employees who find it difficult to report every payment at the time employees receive it, can now send information to HMRC by the date of their regular payroll, but no later than the tax month (starting on the 5th of the calendar month) in which the payments are made.
HMRC have announced that they “Will continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses and consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI or the success of the Department for Work & Pension’s Universal Credit.”
However, from 6 October 2013, normal rules will apply, so all employers will need to report PAYE in real time, every time their employees are paid. Businesses would be well advised to check out their commercial payroll software, which is designed to submit PAYE information as part of their integrated payroll processes.
No one wants to fall foul of HMRC who will, if employers don’t refine their business processes, implement automated penalties. So take advantage of the temporary changes, but plan now for a more automated future that cuts down on the drudge of administration tasks, as well as avoiding the risk of being taken to task by HMRC.
