RTI early verdict & other PAYE related news

April 16, 2013 2013

Optimum PAYE newscast


Real Time Information

It is early days for RTI given that we are only 11 days in to the new tax year but how are things going with this new system for reporting payroll payments and deductions so far ?

If you listen to HMRC, or believe everything you read, things are wonderful. The new Employer Bulletin just published by HMRC proclaims:

"79% of the first employers to try RTI thought it was easy". "The first employers to try RTI felt as confident or more confident than they did using the existing PAYE system". "66% of the first employers to try RTI said the PAYE burden will be less in the future because of RTI"

Feedback from clients so far is maybe not as enthusiastic as this but still, on the whole, more positive than expected. Yes, there have been a number of teething problems in making the first FPS (Full Payment Submission) for some clients but it seems to us that most of the issues have come about through a lack of understanding of what is needed for the FPS or in how the payroll software functions. There have been reports of issues from the HMRC side as well which mostly seem to be caused by delays in acknowledging receipt of the FPS.

Overall verdict has to be that it is too early to consider whether RTI is going to work or not. Maybe once everyone is more in tune with the new software being used we can get a clearer picture of how RTI is going and what needs to be addressed for the longer term.

In the meantime, HMRC has issued some additional guidance to clarify a few points on RTI  National Insurance Number Verification Requests and  Submitting forms P45 and P46 for 2012/13


Employee shareholding status

Unsurprisingly, the proposal reaffirmed in the Budget to give some tax incentives to employees receiving "free" shares for giving up some employment rights has been rejected by the House of Lords. We always believed such a scheme was madness as any employee with any sense would steer well clear of such an arrangement. It is clear that the Government is very keen on this scheme, however, and so they may try to push this through again possibly after making a few tweaks to the proposals.

Reporting Benefits and Expenses

HMRC has introduced a new, online, method for employers to report expenses and benefits each year.

Before everyone celebrates the demise of the dreaded P11D this new method of reporting is extremely limited and only applies when an employer is reporting a nil P11D and P11D(b) return or to give HMRC advance notice that all benefits and expenses have been taxed through payroll and therefore no taxable values will ultimately be declared on forms P11D (which strictly still need to be done).

HMRC has suggested that this functionality may be expanded in due course but we won't hold our breath in this completely removing the P11D burden for employers.

Employment Income Manual update

For the first time in a while, HMRC has updated its EIM, the summary of changes is here.

As ever, it is hard to see exactly what has changed, probably just a few words here or there. We haven't reviewed the amended pages in any great detail yet though so we must put that on our "to-do" list for later (oh joy).


Any questions or concerns about any of the above just let us know.



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