Real-time information (RTI) is the biggest change in pay as you earn (PAYE) since 1944. Some 1.4 million employers have to be ready for its implementation in April.
There are five practical steps for employers to follow to be ready.
First, they need to know their start date. The 6 April is a Saturday, so an employer’s first RTI submission may be its second payroll run. Read more here.
Second, employers must know their new starter process. After their start date, they will not be able to submit P46 forms electronically using the current process. The starter declaration must be part of the full payment submission (FPS) and new rules determine the PAYE code to apply.
Third, employers need to know the three-letter acronyms, including FPS, employer payment summary (EPS) and employer alignment submission (EAS).
Those with deductions relating to the Construction Industry Scheme, a tax deduction scheme, statutory payments or periods when FPSs are not required should read more here.
Fourth, under RTI, employers must send HM Revenue and Customs (HMRC) details of each employee’s earnings, tax and national insurance deducted on or before the date of payment. Read more here.
Fifth, employers should know their software. When will it be ready? What are the new fields and why are they there? Does it cover all their business needs?
Steve Wade is director at KPMG