In April we have another set of rules and regulations being thrust upon the small business sector along with a variety of punishments (as yet to be formalized) for not complying to the letter.
I am talking about the compulsory changes to PAYE and how we report and pay our deductions made from our employees each and every time you run the payroll.
If you are one of those who still reaches for the paper books and tables each time you want to pay your employees, then NOW is the opportune time to finally join the 21st century and move your Payroll to a computer.
With the penalties being phased in over the next year or so for not doing everything on time and in the correct format, you will be forgiven for not wanting to handle your business payroll yourself any more.
HMRC have been issuing lots of guidance recently trying to prepare businesses for this huge change but in my experience, all it has achieved is scaring people by focusing on the penalties for not complying which is frustrating as how much these will be has not been announced yet.
Essentially the change to Real Time Information is quite simple and if you already use payroll software to handle your payroll then as long as you check it is HMRC RTI compliant you will be fine. Not all payroll software is going to be intuitive though by reminding you about sending the returns to HMRC so you may want to look into that before 5th April 2013. The best software will not let you leave the payroll until you have completed all the necessary steps and printouts.
However, as with the Construction Industry Scheme at the moment, missing just one filing date in the year once the penalties start will result in a fine. Miss more than one and you will start going up a sliding scale of fines for non-compliance.
The penalty regime is still up for consultation so we are not clear yet how it will be applied but HMRC are insisting on compliance because the PAYE system has been like this now since 1944 and they are using the move to abolish tax credits and replace them with “universal” credits to justify the imposition of RTI.
There are some things you need to do before the first pay run after 6th April 2013 and the most important is to make sure you have up-to-date information for all your employees (name, date of birth, gender, address and valid National Insurance number). This applies to every employee no matter how much they earn each week so includes those earning less than the NI lower limit. There are no exceptions, no casual labour, no temporary staff and no school kids paid out your own pocket. Everyone has to be reported to HMRC each and EVERY pay run.
You even have to tell HMRC if any of your employees are not paid that week/month.
Sounds a bit draconian? Yes. But the rules are coming and we all have no choice but to comply.
I don’t want to sound too negative about this but I am really concerned about how many rules and penalties we are all subject to now and as each year passes by we get more and more.
But there is a glimmer of hope on the horizon! We offer Payroll Services for Small Business and are ready and waiting to help you out, to remove any concerns you may have over compliance, to ensure each and every deadline is met and to give you total peace of mind. I have set up a system on google documents to help clients with hourly paid employees whose hours vary each week/month. This ensures you can upload your employee details and changes as they happen and be secure in the knowledge that we can see the exact same information and ensure your payroll is updated accordingly.
Lots of small businesses in our local area of Coalville and Loughborough are already finding the peace of mind our Payroll Service Bureau gives them and I am happy to give you the name of a couple if you would like to chat to them about how the system works. For those clients on the bureau system the move to RTI will just happen seamlessly as all the checks have already been done in readiness.
Please give me a ring if you are interested in having your payroll handled by experts for complete peace of mind on 0800 047 0731.