PAYE is changing from April 2013

Most of you will have received a letter from HMRC advising of a new way to report PAYE information from April 2013, and started discussions with your accountant on how to prepare for the change.

So what’s changing?

From April 2013, every time an employee salary payment is made, information will have to be sent to HMRC, at the time the payment is made (or before), using software to send electronically.

And how will it affect my small businesses

While many very small business currently only make an annual return to HMRC, monthly returns will be required. Most impacted will be businesses whose directors/employees are paid below the lower National Insurance threshold.

In order to submit this monthly information, small businesses will need to acquire commercial payroll software or use a payroll service provider, such as an accountant or a payroll bureau, who will do it for you. A further option for businesses with 9 or fewer employees is to use HMRC’s free Basic PAYE tools.

To help you understand how your business will be affected, just follow the charts below:

Basic RGB

Which journey applies to your business can also be identified from the table below:

RTI-PAYE-chart
*These are 2013/14 thresholds

The 3 Journeys

The PAYE obligations of each of the above groups are as follows:

PAYE-RTI_chart

Support from Goddard Solutions

We operate payroll software which is fully compliant with RTI and offer our customers payroll processing for a fixed annual fee of £99, plus a £5 monthly (or quarterly for irregularly paid employees) cost for each employee for each electronic submission made. This cost includes submission of the employer’s annual return, and seamless update of OpenBooks for those customers using this system.

We can also give advice relating to registering as an employer or any other questions around PAYE. Further information on changes under RTI can be found on HMRC’s site:
www.hmrc.gov.uk/payerti/index.htm