Leading North West accountancy firm, Mitchell Charlesworth, is urging retailers to be aware of looming changes to payroll law. HMRC is trialling a new system called Real Time Information (RTI) to improve the operation of Pay As You Earn (PAYE).
Ken Davies, director of payroll at Mitchell Charlesworth, said the new measures will increase the workload for employers who will be required to submit data on a more regular basis.
“It is essential firms are up to date with the new payroll system and are ready to comply with the upcoming changes in legislation,” said Davies.
“Essentially RTI will require employers to submit PAYE information electronically to HMRC on or before each paydate. However, for many SMEs time is precious and this new system will ultimately add to the workload. Therefore it is crucial to get a grip of the new requirements now to ensure payroll systems work effectively into the future. It is vital to the smooth running of any business that staff are paid efficiently and on time.”
The current system allows employers to issue PAYE information at Payroll Year End. The new RTI system will require firms to send this PAYE data, including National Insurance Contributions and students loans, to HMRC every time they pay an employee.
The measures are due to be phased in from April 2013 and will become mandatory for all employers by October 2013.
Davies said it marked a significant change in the payroll system, which has remained almost unchanged for more than 60 years.
“Many businesses will be accustomed to the way their payroll operates,” he said.
“We are urging firms to not let news of this new legislation slip through the net. We are very keen to advise any businesses which may be seeking more detail on the reforms. Employers must be crystal clear on their new obligations.
“For all of our existing clients we will be providing thorough support throughout the RTI transition. We are in the continual process of updating our payroll software to allow the submission of RTI electronically to HMRC.”