What are the changes?
How is this different?
- At the moment you only have to report your PAYE at the end of the year, as opposed to every time you pay an employee. This means that instead of one yearly report, you will now be sending one monthly, weekly, or at whatever specific interval you pay your employees.
- From April 6th you will need to include ALL employees, including nannies and domestic staff, students, casual employees, part-time staff and those below the Lower Earnings Limit on every report.
- Forms such as P14 and P35 will no longer be used. Instead you will need to use payroll software to send a Full Payment Summary (FPS) every time you pay your employees, and an Employer Payment Summary (EPS)each month for any adjustments that you owe.You also need to report anyone joining or leaving the company in your FPS, rather than via P45 or P46 forms.
- You won’t be able to report PAYE through paper forms or the HMRC online service any more. Instead you MUST report using recognised payroll software (if you have less than nine employees then you can download HMRC’s free Basic PAYE Tools)
- You will be able to use payroll software to issue a NI number verification request (NVR) to trace or check a National Insurance Number rather than having to submit a form.
What you need to do
- Update your existing payroll software to allow for real time reporting to HMRC.
- Set up payroll software if you don’t already use this, or download HMRC’s Basic PAYE Tools if you have less than nine employees.
- Register for PAYE Online if you don’t already use this.
- Make sure all information needed for the new system is in place – you may need information that you didn’t previously.
- Ensure your employee data is up-to-date and correct – again, you may need additional information.
- Align HMRC’s data with yours – when you start your RTI reporting you will need to tell HMRC about all your employees using either an Employer Alignment Submission (EAS) or FPS.