York firms told: Prepare for tax revolution

30 Nov 2012 @ 10.26 am
| Business

The pay as you earn rules are changing

Companies could face chaos if they are unprepared for the next year’s revolution in the PAYE tax system, warn leading York accountants Garbutt & Elliott.

The 2013/14 tax year sees the biggest change in the PAYE (Pay As You Earn) system since its introduction in 1944 and all employers will be affected.

The change sees the implementation of Real Time Information (RTI) on April 6, 2013. Under RTI, information about income tax, National Insurance Contributions (NICs) and other deductions due under PAYE must be submitted throughout the year as part of the payroll process, rather than at the end of the year as they are now. The 2012-13 payroll information should be submitted as normal.

Every time the payroll is processed, the PAYE software will collect the necessary information and send it to HMRC online ‘on or before’ the pay date.

Lorraine Young, the payroll manager at Garbutt & Elliott (pictured right), based at Monks Cross, York, said it was crucial that employers were completely up to speed with RTI.

“Every employer must ask themselves whether they are absolutely sure that they have put the necessary changes in place to ensure compliance with the new regulations,” she said.

She explained that HMRC will no longer require the end-of-year Employer Annual Return forms P35 and P14 and they will no longer require submission of forms P45 or P46. Instead, the information will be reported in real time.

“Although the implementation of RTI has been described as a staged process, almost all employers and pension providers will be required to operate RTI from April 6, 2013, with very few exceptions. If all this sounds very complex, then one option is to outsource your payroll.”

For more information contact Lorraine Young, payroll manager, on 01904 464100 or by email by clicking here.