RTI Payroll and the Small Business: What’s Going to Change?
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It’s refreshing to hear that 86% of businesses have already started to plan for implementation of RTI Payroll (real time information payroll), which kicks in from April 2013 in the UK.
RTI is one of the biggest shake-ups in the way businesses large and small interact with Her Majesty’s Revenue and Customs (HMRC), and its implementation is quick.
From April next year, businesses will no longer have to send an annual PAYE submission to HMRC – they will have to do it every time someone is paid.
For SaaS Users
This implies that your payroll software or payroll provider has to be up to the task.
If your payroll provider uses the cloud (Software as a Service) to provide your payroll service, then an automatic update to your software should be a given.
The huge advantage here is that there is no in-house application requiring manual upgrade, and the onus is on the supplier to provide a solution that is fit for purpose.
For non-SaaS Users
If you’re not using SaaS, then your payroll provider should already have talked to you about RTI Payroll.
If you don’t have a payroll provider, well… things might get a little harder.
You will have to plan for these communications with HMRC on a regular basis, and getting them wrong could result in over or under-payments and potentially, penalties.
Not only, then, would you have administrative issues resulting in corrections, you would have employee dissatisfaction.
Trouble, then.
Lack of Preparedness?
So while businesses have been planning for it, they are showing a lack of readiness for the reality of RTI Payroll.
For instance, a KPMG survey highlighted that only 21% had conducted a payroll data cleanse.
What does this mean?
Well, in short, RTI Payroll requires that your basic employee data is correct – from forename and surname through to NINO (national insurance number).
The data cleanse is one of the first actions required in preparation for real time information.
Other Obstacles to Overcome
Implementation is likely to be harder for those with multiple payrolls or high turnover of staff.
In this case, a lot of housekeeping has to be done before next April.
SaaS: Burden of Administration is on Employee
Again, those “in the cloud” will be able to take advantage of Employee Self Service systems – or at least, they should be able to take advantage of them. This puts the onus on employees to ensure that their data is kept up to date.
Of course, reminders need to be sent out and line managers need to be briefed on the importance of personal data maintenance in order that the message gets through to everyone and is acted upon.
However, the burden of administration is removed from HR or Payroll and pushed individually onto employees.
Real-Time Information to Save Time
Real Time Information may sound complicated and may seem a burden at first, but it is intended to be automated – and it is intended to cut out the annual return for all PAYE, saving time.
Summary
So, in short – RTI will save you time, but you only get out what you put in.
Do a data cleanse now, ensure that any earners below the Lower Earnings Limit are on your payroll, and contact your payroll provider to ensure that everything is in place.
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