The filing requirements for PAYE and NIC are becoming stricter with HMRC imposing interest and penalties for late payment and filing.
Penalties start at £100 and rise to £3,000 simply for not filing one of the many forms and returns on time, and late payment of PAYE/NI carries additional fines of 1%-4%.
Coupled with the above there are more items to take into account when calculating PAYE and NIC, for example attachments of earnings, childcare vouchers and student loan payments which all have to be administered, calculated and paid over with little assistance from HMRC.
But that’s just the start…
From April 2013 most employers (and from October 2013 all employers) will be required to submit PAYE information to HMRC as the information is processed. The process acronym, RTI, short for “Real Time Information”, is a new way for employers to report their employees’ pay and tax details. According to HMRC it will make it easier for employers, pension providers and HMRC to administer PAYE!
David Gauke, Exchequer Secretary, is quoted as saying: “RTI is the single biggest innovation in the administration of the tax system since PAYE was brought in after the Second World War. Its introduction will remove admin burdens from businesses of around £300m each year and will support the operation of Universal Credit. As we have seen today, the RTI pilot is going well and on track for April 2013 when most employers will start reporting PAYE in real time.”
Just how successful this scheme will prove, and how robust the IT systems behind it are (and HMRC do not exactly have a glowing track record with major IT projects) time will tell, but what’s for certain is that there will be a raft of new penalties for employers who get it wrong.
For peace of mind you may want to consider employing a professional firm of accountants to administer the payroll for you. You may be surprised at how reasonable such a service could be. Please feel free to contact your local Burgis & Bullock office for more details of our comprehensive payroll outsourcing solutions.