AVN tax RTI webinar Feb 2013


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Slides from a webinar run by Debra Lowndes from the AVN Tax team on 5th February 2013. Tax expert Debra Lowndes takes you through the changes necessary for Real Time Information and tells you what you need to do now to prepare for these changes.
If you'd like to find out more ways of being proactive with tax, you can book a free place (worth £175 + VAT) on our seminars being held later this month at http://www.viptaxevents.co.uk/slideshare/ - we look forward to seeing you there!

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AVN tax RTI webinar Feb 2013

  1. 1. How Real Time Information Affects YouA webinar from the AVN Tax team – February 2013
  2. 2. In this webinar I’ll show you•The technical stuff – how does it work?•The jargon – what does it all mean?•The penalties - what if you get it wrong?• A new service – when you get it RIGHT!• Systemise the process – keep getting it right!•Introducing AVN Tax - to help you.•How to effectively price your service.
  3. 3. This is me……. Debra Lowndes
  4. 4. Why is this being introduced
  5. 5. When will this all happen?• Pilot scheme available from April 2012 for large employers >5000 employees.• Smaller employers joined in January 2013.• Compulsory for all from April 2013.
  6. 6. however…..• New PAYE schemes set up from November 2012 operate RTI immediately• Employers who change to software providers with payroll products in the pilot will be able to start submitting returns in real time from the date they change
  7. 7. What’s changing?Mandatory electronic filing of all payments madeto employees subject to PAYE from April 2013Payments are made by way of a Full PaymentSubmission (FPS).Payroll Software will be required to send informationeither by the • Internet via the Government Gateway; or • Electronic Data Interchange
  8. 8. What won’t change • End of Year Certificates on form P60 • Date of payment to HMRC. • HMRC PAYE online facility • Expenses and benefits returns • Notices of Coding • The existing Construction Industry Scheme
  9. 9. Potential problem areas • Hours worked – may change • Passport number – to validate new employees • Employees earning below the Lower Earnings Limit • Irregular employment indicator
  10. 10. Typical payroll changes ad:-• Employee started on the payroll 3 months ago – can you put him on the payroll from that date?• Information received 10 July 2012 to process wages for 4 weeks, Commencing 21 May 2012 and 4 weeks commencing 18 June 2012.• Revise payroll for extra hours not originally notified.• Revise payroll as an employee has left.• Revise payroll as a result of employee holidays• Revise payroll as employee on maternity leave• Retrospectively adjusting for hours
  11. 11. Here comes the jargon…..• FPS Full Payment Submission• EAS Employee Alignment Submission• PID Payroll ID • Include a payroll ID to make it easier for you to identify the employee, and HMRC will then use this number in correspondence with you• Payroll ID changed indicator • Use this field to report that the Payroll ID has changed. If the Payroll ID has changed since the last FPS tick the Yes indicator and enter the old Payroll ID as well as the new one so that its clear that this is the same employment
  12. 12. and more jargon…..• Old payroll ID for this employment • If the Payroll ID used in this FPS has changed since the last submission, you must put the previous one here.• EPS - Employer Payment Submission • Submitted monthly to record recovered statutory payments or NIC on recovered statutory payments, SSP, SMP SPS adoption payments.• EYU – Earlier Years update• NVR -NINO Verification Request • Used to request verification of an NI number for an employee.• DPS – Data Provisioning Service • The system HMRC uses to send messages to your payroll.
  13. 13. and even more jargon…..• IPI – Irregular Payment Indicator • For any Casual or Occasional workers, particularly those who may not work for you for three months or more. It informs HMRC that the individual is still employed by your company.• SUN – Service Use Number • This is a unique number which is needed to cross reference BACs payments to and submissions made under RTI• PALI – Payment After Leaving Indicator • This is needed if an employee has appeared as a leaver on an FPS but you need to pay them again
  14. 14. The implications of getting it wrong • Employees not receiving the amount of Universal Credit to which they are entitled • Employers and pension providers receiving unnecessary and unwanted contact from HMRC: • Personal data issues • Tax deduction issues • Benefit entitlement issues • Employers and pension providers who do not meet their statutory obligations run the risk of incurring penalties. Once HMRC hold updated information on PAYE/NI deductions it appears inevitable that the next stage will be collection by Direct Debit.
  15. 15. PenaltiesNo change:PAYE and Class 1/1a NIC –paid lateLate Filing of Returns –2012/13 & 2013/14No charge:In year returns –inaccuracies 2012/13In year returns –inaccuracies 2013/14
  16. 16. Preparation for April 2013 HMRC is writing to all employers not in the Pilot. • Letters will be sent to the business address they hold. • Agents will not be sent a copy. • Informs employer that reporting in real time is coming. • Accompanied by a flowchart telling employers what to do to get ready.
  17. 17. Speak to your Collate employeepayroll service informationprovider toensure theyare RTI ready Register for PAYE Online Be prepared to complete information for casual, part timeEnsure you have and low paidRTI enabled employees fromsoftware April Review your starter and leaver procedures
  18. 18. Which software?• Software must be compatible with HMRC systems. • Commercially developed either • Free • Paid for • HMRC basic PAYE tool• Payments by BACs will require a unique reference number.•
  19. 19. Useful linkswww.hmrc.gov.uk/softwaredevelopers/paye/rti -software-forms.htm Functionality Basic Payroll values checked Full Payment Submission Employer Payment Summary Employer Alignment Submission NINO Verification Request
  20. 20. Employee data you need toknow…….. Full name Date of birth NI number Gender Address Hours worked
  21. 21. Key employee information Date of Name NI number birth• Full • Always enter the • Always enter the forenames, not correct date of correct NI number initials birth • Correct format – 2• Forenames and letters, 6 numbers surname in the • Enter the and a final letter – correct order day, month and full A, B, C or D• Make sure they year, such as • Verify from official are spelt correctly 05/05/1985 documents• Don’t put titles in name boxes
  22. 22. Speak to your Collate employeepayroll service informationprovider toensure theyare RTI ready Register for PAYE Online Be prepared to complete information for casual, part timeEnsure you have and low paidRTI enabled employees fromsoftware April Review your starter and leaver procedures
  23. 23. Low paid and casual workers• All employees must be included on the Full Payment Submission• Irregular payments If the employee is not paid on a regular basis.
  24. 24. Employer Preparation• Update/acquire RTI-enabled software or use a payroll service provider.• Ensure employee data is correct and complete.• Become familiar with the information that needs to be reported to HMRC.• Review your recruitment and payroll processes.
  25. 25. Systemise the process• Champion• Establish impact on work load• Define changes to systems• Purchase / install / train on software• Contact existing payroll clients• Review all payroll data• Contact existing clients – non payroll• Contact prospects• Review/refine systems
  26. 26. •Systems•Team•Clients•Up to date•The one thing we need to get right…….
  27. 27. www.viptaxevents.co.uk/RTI/
  28. 28. www.viptaxevents.co.uk/RTI/