UK businesses who pay HM Revenue and Customs (HMRC) quarterly are approaching their first payment deadline since Real Time Information (RTI) PAYE reporting was introduced.
More than 1.5 million employer PAYE schemes are already reporting to HMRC in real time since the new requirements came to fruition in April.
As a result, HMRC’s head of RTI, Jane Brothwood has provided a host of important steps to consider for SMEs preparing to meet their first RTI deadline.
For employers paying HMRC quarterly, the first deadline is approaching – 19th or 22nd July – depending on the method of payment.
Notify HMRC if you don’t pay an employee in a tax month
It’s important to make HMRC aware if you know you won’t be paying an employee for a lengthy time period – one return can cover up to six months. Even if you pay quarterly it’s important to provide at least one return each month using your payroll software. Otherwise, HMRC will estimate the amount due monthly and you will be required to pay the estimated amount in full at the end of the quarter.
Make HMRC aware of any deductions from pay
Unless you have informed HMRC of deductions such as maternity pay or statutory sick pay, it will ask you to pay the full amount you deducted from your employees.
Log on to the PAYE Liabilities and Payments viewer
Make the most of the technology available to you by logging into HMRC’s online PAYE Liabilities and Payments viewer, to check what its records show you owe and what you have already paid.
HMRC usually updates the amount owed on the sixth and 20th of each month, based on all returns received prior to those dates. Any returns made after these dates will not be visible until the following update.
Submit returns on time and in full
Employers paying their tax quarterly should ensure they submit returns prior to their applicable deadline and the full amount requested. Timely payments will ensure businesses avoid building up PAYE debts they can’t meet and ensure employers who pay on time are not disadvantaged.
Read this reminder of Real Time Information and paying HMRC for further information.
SMEs urged to get used to the new RTI system
Small businesses who don’t yet report in real time are urged by HMRC to get used to the system before the new automated penalties and interest start in April 2014.
Earlier this year HMRC announced a temporary relaxation for businesses with less than 50 employees, meaning that SMEs can report PAYE information to HMRC once a month, rather than each time they pay their employees. This relaxation has been extended to 5 April 2014 to tie in with the end of the current tax year.