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Are you ready for your first RTI year end?

Close up of payslip

Basically you will need to:

  • Prepare P60′s (but no P14 and P35) by 31st May
  • Submit your final FPS or EPS
  • Update your Payroll Software for the New Tax Year

You can order your P60′s for free from HMRC http://www.hmrc.gov.uk/payerti/forms-updates/forms-publications/onlineorder.htm

Here is a great video from HMRC

HM Revenue & Customs (HMRC) plans to make its Basic PAYE Tools product for the 2014-15 tax year available on 3 April 2014.

The 2014-15 version of Basic PAYE Tools will be provided as an update to the existing version rather than a separate download, so existing users do not need to go to the HMRC website to get the update.

steve@bicknells.net

RTI non-filing notice?

If your business has a payroll then you may, like me, have received an RTI non-filing notice from HMRC. “Rubbish” is a polite version of my reaction. RTI should be the most straight-forward part of the payroll. The hard part is often calculating who is owed what if you have many non-salaried staff. So it would be fair to say that I was a bit miffed.

OK, so what is the consequence? Well until April, nothing. But, after April, possibly a fine from HMRC. So  I phoned HMRC. Their assumption was that I had not filed a return, hence the RTI non-filing notice. More worrying was that they could not tell me specifically why I had received the notice. My theory is that it was caused by correctly filing a return on Feb 6th for a Feb 7th payroll which is after the HMRC PAYE month-end of Feb 5th.

I can only hope that HMRC get their act together with the RTI system. A quick look on the web revealed a tidal wave of RTI non-filing notices this week.

Of course if you really haven’t kept on top of things then you need to take a deep breath and file your RTI returns. And get some help from a Chartered Management Accountant if you need to.

Helen Alexander

Millbrook Financial Management Ltd

Will Temp Agencies avoid Auto Enrolment by using Postponement?

Close up of payslip

The date workers are enrolled depends on the size of the company they work for and is being rolled out over the next six years (this is called a staging date).
  • Large employers (with 250 or more workers), have started automatically enrolling their workers and will continue to February 2014 (some employers may choose to start earlier)
  • Medium employers (50 – 249 workers) will have to start automatically enrolling their workersfrom April 2014 to April 2015
  • Small employers (49 workers or less) will have to start automatically enrolling their workers from June 2015 to April 2017
  • New employers (established after April 2012) will have to start automatically enrolling their workers from May 2017 to February 2018
  • Employers who chose to use Defined Benefit or Hybrid Schemes can delay their staging date until 30 September 2017

You can postpone the start of Auto Enrolment for up to 3 months and then re-test for eligibility using this method could mean that Temporary Staff Agencies could avoid Auto Enrolment for their temps. This also means that many agencies will use NEST because other pension schemes will not want to sign them up as they many not actually receive any contributions.

Pinsent Masons blogged:

Agency workers are different from other workers and so present particular challenges. Many are seeking work for only a short period. Many will register with a number of different agencies and will, in fact, only be ’employed’ by a particular agency for a short period. The auto-enrolment obligation applies to all workers who meet the age and earnings thresholds, but there are options which may assist those employing high churn groups of workers.

Employers can make workers wait up to three calendar months before enrolling them into a pension scheme. If the worker has left by the end of that three-month period, then there is no need to provide that worker with a pension.

If you do postpone, make sure you follow the rules otherwise there could be harsh penalties under the Pension Act 2008 Section 45

Offences of failing to comply(1)An offence is committed by an employer who wilfully fails to comply with—

(a)the duty under section 3(2) (automatic enrolment),

(b)the duty under section 5(2) (automatic re-enrolment), or

(c)the duty under section 7(3) (jobholder’s right to opt in).

(2)A person guilty of an offence under this section is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both;

(b)on summary conviction to a fine not exceeding the statutory maximum.

steve@bicknells.net

Can I process my payroll once a year?

Close up of payslip

Yes, HMRC are now able to process requests for annual payrolls.

An annual scheme must meet all of the following requirements:

  • all the employees are paid annually
  • all the employees are paid at the same time/same date
  • the employer is only required to pay HMRC annually

Once a business is registered as an annual scheme, an Employer Payment Summary (EPS) is not required for the 11 months of the tax year where no payments are made to the employees.

We all have busy schedules………

Annual schemes are likely to be adopted mainly by very small businesses and single person companies as you can pay all your salary in one go and save yourself 11 months of RTI reporting.

steve@bicknells.net

Top 5 useful things I have learnt about RTI

No money in a bag

Real Time Information (RTI) has now been with us for a few months and once you get used to Full Payment Submissions (FPS) and Employer Payment Summaries (EPS) its not too bad.

HMRC recently reported:

With over 1.4 million PAYE schemes successfully reporting in real time, the launch of PAYE Real Time Information (RTI) continues to go well. The vast majority of employers (83% of small & medium size employers and 77% of more than 1 million micro employers) have started reporting in real time, but we are aware that there are still some employers who have not started yet.

Given time you might even get to Love doing your RTI Payroll as much as Suzie Humphreys…

Here are some things that I have learnt that you might find helpful:

Split FPS Submissions

You can only submit each employee once for each payment period but you can make more than one Full Payment Submission, this is useful if you have Monthly and Weekly payrolls, or a late starter you have process after the FPS has been submitted, or if you split your payroll by seniority and different staff process sections.

Hashtag and Paying by BACS

At the moment if you pay employees by Direct BACS using systems such as Nat West Payaway the Direct BACS submission needs to include a Hashtag to enable HMRC to match the payment with the FPS, however, if you don’t use Direct BACS and you just pay by Online Banking, Bankline, BACS or CHAPS or any other method you don’t need the Hashtag. I am sure that will change!

Starters and Leavers

When you enter a new employee HMRC are notified on the first FPS that they appear on and you must no longer use a P46 to get starter information you need to us the new HMRC Starter Checklist

P45’s are just for the Employee to refer to and are useful to show to their new employer, don’t send them to HMRC. HMRC are notified of leavers on the FPS.

CIS

If you have deductions under the Construction Industry Scheme you need to enter them on the EPS to reduce the amount of tax payable.

NI Holiday

NI Holidays for new companies end in September 2013 but until then need to be entered on the EPS. Form E89 is used to keep track of how much has been claimed.

Here are some more useful tips and facts on RTI:

Relaxation of Rules for Small Companies

HM Revenue & Customs (HMRC) recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for small businesses.

HMRC is planning to extend the temporary relaxation for employers with fewer than 50 employees to April 2014. This relaxation means that these businesses are still required to report through the new system, but are able to do so once a month (but no later than the end of the tax month (5th)), rather than each time they pay their employees. This gives small businesses that pay weekly (or more frequently), but who only run their payroll at the end of the month, some extra time to adjust to the new requirements.

Annual Schemes

Many micro businesses such as one person companies are switching to annual payrolls.

An annual scheme must meet all of the following requirements:

  • all the employees are paid annually
  • all the employees are paid at the same time/same date
  • the employer is only required to pay HMRC annually

Once a business is registered as an annual scheme, an Employer Payment Summary (EPS) is not required for the 11 months of the tax year where no payments are made to the employees.

But currently HMRC are unable to process requests to become Annual.

HMRC are working to rectify this position and will publish a further ‘What’s New’ message to announce when this is ready.

Late Filing Penalties

If you do not report the final payment made to an employee, for the tax year 2013-2014, by 19 May in the following tax year you will be charged a late filing penalty.

Penalties are calculated on the basis of £100 per 50 employees and accrue for each month (or part month) that a return remains outstanding after 19 May.

If you fail to report this information by 19 May, or tell HMRC no return was due by sending an EPS, they will write to you (and your authorised agent if you have one) advising that a penalty may already have been incurred and that you must report this information as soon as possible to prevent the penalty building up any further.

steve@bicknells.net

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