Payroll Submissions are Changing
Between April 2012 and October 2012, everyone who pays employees through the PAYE scheme will receive a letter from the HMRC informing them of the date they are required to start submitting their payroll reports when they pay their employees instead of at the end of each tax year. This new system is called Real Time Information, or RTI. Take a look at this short information video for more information about RTI.
First Steps – Employer Alignment Submission
RTI is not complicated if you use a computerised Payroll system, such as Sage Payroll, but you do need to be prepared and organised before your first submission. When you receive your letter, you will be asked to perform an Employer Alignment Submission (EAS), which will prove that the system is working and that your system can ‘talk’ to the Inland Revenue systems correctly.
The most important thing with the new system is ensuring your records are accurate and up to date. Don’t wait for your letter to arrive – if you run your own payroll why not check that your data is correct now, while you have plenty of time to check and correct your information. Things like the company information need to be accurate – including your Accounts Office reference – which was not required previously.
Check your Employee Records
For employees you need to make sure you have their full name – nick names and initials are not allowed – full address including postcode, the correct date of birth, gender and National Insurance number. This may sound basic, but I have seen many payrolls where the processor puts fake information into the system so that the employee gets paid – then it is hard to remember to go back and change it.
Sage 50 Payroll RTI Edition includes an excellent report which you can print out from your payroll and hand to each employee so that they can check and correct any incorrect information, like missing middle names, so you can be sure that your data is correct. The Real Time Information Help Centre is also there to guide you through the changes.
I will be writing more blog posts over the next few weeks with more RTI information – but let me leave you with a quote from one of our customers who has already made their first submission as part of the HMRC Pilot scheme – and they used Sage Payroll for 2012/13 for the task.
“Sage Payroll with the RTI update has made the processing of all 16 staff an extremely simple process. I am part of the pilot for trialling RTI and Sage payroll software. Our company went live with our first pay date in November and In order for the transition to be smooth I had ensured that all my personnel data was accurate within Sage Payroll. (A report was available to print and all staff were asked to check their individual details.) On the processing day, there was no extra effort except a couple of clicks to submit live information to HMRC. An email acknowledged receipt and now on to next month.” Tracy Waumsley, Accounts manager at Encapsulite International Ltd