RTI again! Changing PAYE procedures
The year-end procedures for payrolls and PAYE have changed. Real Time Information (RTI) brought in online reporting for most employers during 2013 and a regular 'full payment submission' (FPS) or 'Employer Payment Summary' (EPS) must be made to maintain compliance. As we approach the end of another tax year, it is worth noting what is different this year. At the time of writing the section of the HMRC website dealing with end-of-year tasks has the following statement:
"Do not send forms P35 or P14 for 2013-14 tax year"
From 6 April 2013 employers started reporting PAYE information to HMRC in real time. You must report your payroll information by submitting FPS and EPS. Don't try to send forms P35 or P14 for 2013-14 or later tax years - if you do they'll be rejected.
Now that is a clear statement and accords with the tax law and PAYE regulations. However, allegedly some tax officers are still sending out letters stating "Adjustments should be included on your 2013/14 P35"! It seems the message has not got through to everybody and confusion abounds. So what do we know?
- The proposed RTI penalties were removed for 2013/14 so that no penalty will be charged for late filing if the final FPS (or EPS) is submitted by 19 April.
- HMRC has announced that existing employers with nine or fewer employees, who need more time to adapt, can report PAYE information on or before the last payday in the month until April 2016.
- If you don't report the final payment made to an employee, for 2012-13 and 2013-14, by 19 May following the end of the tax year, a late filing penalty will be charged.
- Penalties are calculated on the basis of Â£100 per 50 employees and accrue for each month (or part month) that a return remains outstanding after 19 May.
- New late filing penalties will apply to returns due from employers for the tax year 2014-15 onwards.
We need to be informing our clients what they need to do with payroll reporting and RTI and it seems that 19 May 2014 is an immovable deadline for completing the PAYE reports for 2013/14. For the regular readers of ICAEW publications you will know that there are still many 'teething troubles' with RTI such as duplicated employees and the inability of HMRC officials to see the same online data as employers. The HMRC 'RTI Resolution Team' seems inundated with a backlog of discrepancies to clear. There are calls to extend the date from when RTI penalties start beyond 6 April 2014. It is difficult to judge how the system will develop during 2014 which takes away one of the central pillars to managing an economy to help business; i.e. 'certainty'.
As with all such tax situations, advice should also be sought before proceeding.Â For further details call Alan Boby on 01295 250401 or email firstname.lastname@example.orgAlan BobyEllacotts LLP
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