RTI update
Major changes to the way PAYE information is collected began in April of this year with the introduction of RTI (real time information) system for PAYE. The system involves employers sending HMRC information about tax and other deductions from employees’ pay when the employee is paid, rather than at the end of the year as was historically the case. This marked the biggest reform of the PAYE system since it was introduced over 70 years ago.
Until April 2014 employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).
HMRC have recently published new PAYE Regulations which includes:
- changes to the rules for direct collection schemes and employers exempt from online filing;
- the provisions needed in the PAYE, the NICs and the CIS Regulations to complete the legislation for late filing and late payment penalties;
- an amendment to switch off the current late filing penalty, and a small change to terminology.
The closing date for comments on the proposed legislative changes is 24 January 2014.