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Pay as you earn (PAYE)

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Pay as you earn (PAYE)

  1. 1. Pay As You EarnImproving the operation ofPay As You EarnReal Time InformationJanuary 2013 PROTECT 05/11/2012
  2. 2. The objectives of the RTI Programme• To modernise and improve the operation of PAYE so that, over time, PAYE deductions for individuals will become more accurate• To support the operation of Universal Credit when introduced in 2013 by the Department for Work and Pensions PROTECT 05/11/2012
  3. 3. Key facts• The RTI Programme is on track and on time• Unless in the pilot or HMRC has indicated a later date, the vast majority of employers and pension providers will be legally required to begin submitting PAYE information in real time in April 2013…• …with practically all employers routinely reporting PAYE in real time by October 2013• The structure of PAYE remains unchanged…• …but the way in which employers and pension providers send PAYE information to HMRC is fundamentally changing PROTECT 05/11/2012
  4. 4. The pilot• The pilot started as planned on 11 April 2012: • 320 employers joined between April and June 2012 • by the end of December 2012, more than 3 million individual records were being reported in real time; and • by March 2013, we aim to have PAYE information being reported in real time for around 6 million individuals• HMRC continues to work with payroll software developers and volunteer employers to iron out wrinkles in a controlled environment PROTECT 05/11/2012
  5. 5. Feedback from pilot employers• RTI is working well - the general consensus to date is that reporting PAYE in real time is easy• Support from both HMRC and software developers has been good• Submission times remain quick: submissions with smaller numbers individual records have been made in seconds and the largest submission of three schemes including over one million individual records was made in less than one hour.• Bacs hashes continue to flow successfully and have been correctly matched across the pilot schemes where payment to employees is made via Bacs. PROTECT 05/11/2012
  6. 6. Feedback from RTI pilot: Data Quality• Data quality is important to prevent submissions being rejected. Check your data to ensure you have included all the mandatory fields for all employees (Name, Date of Birth, Gender, Address) - and that it is correct. Include the NINO where known• Check your submission to ensure that you have not included invalid characters such as ‘ or / in particular fields. Some characters may be permitted in some fields and not others. Please check to ensure you are using the most appropriate characters for each field. PROTECT 05/11/2012
  7. 7. Preparing for real time reporting: key actions• Ensure employee data is correct and complete Full name Date of birth National Insurance number Gender Address PROTECT 05/11/2012
  8. 8. Tips in recording key employee information Date of NationalName Insurance birth number • Full forenames, • Always enter not initials • Always enter the correct date the correct NI of birth • Forenames and number surname in the • Enter the day, • Correct format correct order month and full – 2 letters, 6 year, such as numbers and a • Make sure they 05/05/1985 final letter – are spelt A, B, C or D correctly • Verify from official • Don’t put titles documents in name boxes PROTECT 05/11/2012
  9. 9. Feedback from RTI pilot: Payroll Alignment• EAS or First FPS – from April, where employers have daily, weekly, monthly payrolls under one PAYE scheme reference, the EAS may be submitted in parts. This does not apply when a First FPS is being submitted• Don’t forget to include all employees who currently work for you - and those who have left since 6 April.• EAS and FPS timing – after submitting the EAS or first FPS, employers should wait 24 hours before submitting the FPS. PROTECT 05/11/2012
  10. 10. Feedback from RTI pilot: Points to Remember!• Ensure you have your correct Accounts Office Reference number.• Ensure the amount reported on your FPS/EPS matches the amount paid on following 19th/22nd.• Check you have registered for the Government Gateway and your credentials are valid prior to submission.• Ensure that your Bacs software has been updated where you pay your employees by direct Bacs.• Only include the cross reference (hash) where you make payment of PAYE income via Bacs. PROTECT 05/11/2012
  11. 11. Recent announcements• New guidance relating to the reporting of notional payments, earnings and notional payments delivered by overseas employers and employment income paid in respect of employment-related securities http://www.hmrc.gov.uk/rti/expats-RTI.pdf• Ad hoc payments made outside of the regular payroll and payments which vary according to the work done on the day, where it is impractical to report on or before. http://www.hmrc.gov.uk/rti/employerfaqs.htm#14• New guidance relating to penalties, returns and payments for 2012-13 and 2013-14 http://www.hmrc.gov.uk/news/payerti-payments.htm PROTECT 05/11/2012
  12. 12. Summary of key actions to take to preparefor real time reporting• Update/acquire RTI-enabled software or use a payroll service provider• Ensure employee data is correct and complete• Review: • employee data • recruitment and payroll processes• Become familiar with the reporting requirements PROTECT 05/11/2012
  13. 13. Help and support Real Time Information homepage www.hmrc.gov.uk/rti/ Preparing for operating PAYE in real time http://www.hmrc.gov.uk/payerti/getting-started/rti.htm Guidance on operating PAYE in real time http://www.hmrc.gov.uk/payerti/index.htm Information to be reported to HMRC http://www.hmrc.gov.uk/payerti/reporting/what-to-report.htm Data Quality homepage http://www.hmrc.gov.uk/rti/dip/index.htm PROTECT 05/11/2012
  14. 14. Help and support FAQs for employers http://www.hmrc.gov.uk/rti/employerfaqs.htm Basic PAYE Tools www.hmrc.gov.uk/payerti/getting-started/paye-tools.htm www.hmrc.gov.uk/bpt2013 Payroll Alignment http://www.hmrc.gov.uk/payerti/reporting/payroll-alignment.htm See payroll software that has PAYE Recognition http://www.hmrc.gov.uk/softwaredevelopers/paye/rti-software- forms.htm Register for e-mail alerts www.businesslink.gov.uk/hmrcemployeremailalerts PROTECT 05/11/2012

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