Under the current guidance in issue, HM Revenue & Customs (HMRC) have stated that if an employer is not currently operating PAYE because they are not obliged to, their circumstances will not change under Real Time Information (RTI).
Under the current PAYE system, employers tell HMRC what deductions they have made from employees pay after the end of the tax year. Only then are HMRC able to review whether the correct deductions have been made under PAYE.
Moving forward under RTI, HMRC will be receiving information when, or before payments are made. This should mean more employees will pay the right amount of tax and National Insurance in the tax year.
Based on the information you have supplied, you will not be obliged to register as an employer and operate RTI. Having said that, the Department for Work and Pensions will need to be informed of your employees’ earnings for tax credit purposes, but there will be an alternative process for this; rather than the employer reporting under RTI.
If you would like to discuss RTI or your payroll in more detail, please feel free to contact your local TaxAssist Accountant.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.