Posts Tagged ‘SME’

SMEs Urged to Prepapre For Payroll Law Changes

Tuesday, June 26th, 2012

An accountancy firm from the North West is urging SMEs to be prepared for major changes to payroll law.

Real Time Information  is being introduced by HMRC in April 2013 as a means to improve the operation of Pay As You Earn. In the latest development HMRC has published a consultation document on the penalty system for non-compliance – which could open up businesses to significant fines.

Mitchell Charlesworth, which has offices in Manchester, Liverpool, Chester, Warrington and Widnes, says it is vital firms start preparing for RTI now.

Mitchell Charlesworth’s payroll manager Joanne Nieman said:

“The new RTI system is due to come into effect next year and if firms are not careful it could be a nasty banana skin. Our strong advice is that firms give themselves enough time to prepare. Our main concern is that leaving this too late could prove time consuming, costly and disruptive especially for small to medium sized firms.  It is important to note that the transition to RTI will be mandatory for all employers and failure to comply will result in fines. We are looking to support employers so they understand their new responsibilities and take the right action to prepare for the change.”

Mrs Nieman said while the existing system allows employers to issue PAYE information at Payroll Year End through the use of electronic versions of P35 and P60 forms, the new RTI system will require firms to send this payroll data, via the Government Gateway, on or before the date each employee is paid.

The latest proposals from HMRC could see a minimum penalty of £100 per week for each late or non-submission per 50 employees. Penalties will increase depending on employee numbers and the duration of a late submission.

Mrs Nieman said the RTI proposals are constantly being updated and is advising employers to address four key areas.

Mrs Nieman continued:

“Businesses can prepare for RTI in a number of ways. Firstly, they can submit employee data to HMRC before RTI is live to help correct any inaccurate or incomplete data. Secondly, they can improve and maintain their existing data ensuring they have dates of births, full names and addresses of employees on the payroll. Another vital step is contacting the payroll software supplier, or payroll provider, to ensure they can deliver on RTI. Finally, employers must consider banking and whether they need to upgrade their BACS facility to accommodate RTI.”

HMRC is currently trialling RTI with hundreds of employers. New employers will be able to join the RTI trial from November, to avoid starting a new scheme in April 2013.