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Deadline looms for real-time payroll reporting to HMRC

Firms must update software by April to meet new reporting requirements 

3 January 2013

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By Manju Manglani, Editor (@ManjuManglani)

UK employers will be legally required to provide HM Revenue and Customs with real-time information (RTI) on all salary payouts from April 2013.

The new reporting process, which for many firms will involve an investment in new or updated payroll software, will replace the previous process of submitting separate returns to HMRC at the end of the year.

From 6 April 2013, employers will be required to use RTI-enabled payroll software to send PAYE returns electronically to HMRC each time they pay their employees as part of routine payroll processes. The returns should include details of all employees’ pay, tax and deductions.

Ruth Owen, HMRC’s director general of personal tax, said: “Employers will need to send their first return – called a full payment submission or FPS for salary or wage payments made to employees on or after 6 April – and if they have 250 or more employees they will have to send an employer alignment submission before the first FPS. 

“Although reporting PAYE in real time will be straightforward for most, some preparation is needed. There is more to it than simply buying or updating software – although this is key.

“Employers may need to add employees such as casuals or those below the lower earnings limit to their payroll system and must think about their payroll practices to make sure that they work for real-time reporting.” 

Further information on the move to RTI can be found on HMRC’s website.

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