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RTI: The changes

The single most significant change to PAYE since 1944. Why is it all changing?

As an employer (or us if we process your payroll for you) you must confirm to HMRC on every occasion you pay wages or salaries the amounts that are going to be paid. So if you pay employees every week that is going to mean a weekly report going to HMRC before you pay wages.

For your business the biggest impact – other than the changes it may mean to how or when you pay wages – is going to be on cashflow as HMRC will now know before you pay wages, how much tax and national insurance you must pay them.

HMRC, under RTI, require an accurate statement of the number of hours worked by each employee. Just now the only check on whether you are paying the National Minimum Wage (NMW) or not is if an employee complains. Thankfully at the moment it will only be necessary to report hours in bands: 0-16 hours; 16-30 hours and over 30 hours but it could still lead to more NMW enquiries if the numbers don't stack up. For example an employee working in the 16-30 hours category and being paid £100 per week aged over 18 COULD be being paid less than NMW.

The only upside to all of this is that there are no more annual payroll returns to be completed. Instead of one annual return, there will be at least twelve monthly returns to be made and maybe as many as 64 separate returns if you pay employees monthly and weekly.

We’ll be running some information sessions in February next year so if you’d like to come along to one of those sign up below and we’ll make sure you’re invited.

Back to the RTI Main page

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