RTI will be compulsory for all employers by October 2013
15th January, 2012 by admin
I am obliged to GCMA Auditors PW John and Co for the following useful tips:
Is your payroll information ‘clean’?
The taxman is asking all employers to spring-clean their payroll data to prepare for RTI. What does RTI stand for? It stands for Real Time Information, and within the next 18 months it will become as familiar to you as PAYE.
RTI is a new way of submitting payroll data to the tax office. Instead of sending the PAYE information in annually after the end of the tax year, all employers will have to submit the payroll data online on every occasion the payroll is run. This will allow the taxman to understand who is being paid what amounts, and what PAYE is due, on a real-time basis. The details of employees’ pay will be passed to the Department for Work & Pensions, to allow the amount of universal credits (which are replacing tax credits from
October 2013) paid to workers to be adjusted on a monthly basis.
RTI will be compulsory for all employers and pension providers by October 2013.
Before payroll data can be accepted under the RTI system it must be ‘clean’.
That means having an accurate date of birth, full official name (not just initials or nickname) and correct National Insurance number, for each and every employee. If the data for one of your employees does not agree to that on the tax office computer, the submission of the payroll data under RTI may fail, and you may get fined.
It will take some time to check the details of every employee on a large payroll, so it would be best to start this task as soon as possible.
Online VAT filing compulsory
Are you already filing your VAT returns online? If not, then you need to prepare to switch to online filing as this will be compulsory for all VAT-registered businesses from April 1, 2012. Don¹t leave this task until the last minute as it can take a few weeks to receive the unique user ID you need from the tax office. You will also have to create a password and set up a system to pay the VAT you owe.
You will no longer be able to pay the VAT due by cheque. You have to pay by electronic means. This includes using a direct debit, bank transfer such as CHAPS or BACS, a personalised bank giro payment slip paid in at a bank (these need to be ordered in advance), or a debit card or credit card over the internet.
The good news is that the tax office has now instructed its bank to accept tax payments by the faster payment service. This means the tax or VAT due will take less than a day to clear from your account to the taxman’s bank account. Before relying on this shorter timescale, check whether your bank account is set-up to use the faster payment service and if any money limits apply. Many bank accounts can only pay out up to £10,000 by electronic payments in one day. If your VAT bill exceeds that cap you may have to spread the payment over several days, or talk to your bank about other transfer methods.
Keith Lloyd is CEO of the GCMA
