THIS IS VERY IMPORTANT INFORMATION
What's changed - PAYE in real time
From 6 April 2013 you will have to start reporting PAYE information in real time. You may see this referred to as Real Time Information - or RTI.
Unless HM Revenue & Customs (HMRC) has notified you otherwise, changing to PAYE in real time is mandatory. Each time you pay an employee after 6 April 2013 you must submit details about employees' pay and deductions to HMRC using payroll software.
Some employers have already started in 2012-13 as part of an HMRC pilot.
How will it affect you?
As an employer, each time you pay an employee, you already keep payroll information. After 6 April 2013 you will still operate PAYE in the same way but you must submit the payroll information you already keep to HMRC on or before the day you pay your employees.
You use a Full Payment Submission (FPS) to do this.
Your payroll software will generate the new reports you need and submit payroll information online. These will include details of:
You no longer submit end-of-year forms P35 and P14 and the starter and leaver process is simplified. You continue to give your employee a form P45 (employee parts) when they leave but you no longer send forms P45 (part 1) or P46 to HMRC. Instead you must report all starter and leaver information via your payroll software each time you pay someone.
This means that employers (or their accountant, bookkeeper or payroll bureau) will have to:
• send details to HMRC every time they pay an employee, at the time they pay them
• use payroll software to send this information electronically as part of their routine payroll process
How you submit your PAYE details
When you run payroll, your software gathers the PAYE information you send to HMRC, based on the payroll entries you make. You can use any RTI-enabled commercial payroll software (there are some free packages available) or HMRC's Basic PAYE Tools package which is designed for employers with nine employees or fewer.
You submit your PAYE information online to HMRC using commercial payroll software or HMRC's Basic PAYE Tools, if it's suitable for you. You do this via the Government Gateway, the online entry point to government services. You cannot use HMRC's PAYE Online Returns and Forms direct from the HMRC website to send this PAYE information.
You may be able to use Electronic Data Interchange (EDI) if you use commercial software. EDI is a dedicated connection or a secure network more suitable for large employers with employees running into the thousands. If you want to use EDI you must check if your payroll software supports it.
Changes to PAYE Online for real time reporting
Employers who are reporting their payroll information to HMRC in real time will use fewer features of PAYE Online than they did previously - even though those features still exist for employers not yet operating PAYE in real time.
You still submit reports online but these reports will be sent directly to HMRC using your payroll software or HMRC's Basic PAYE Tools.
You still need your PAYE Online login (User id and password) because although you can't log in directly to PAYE Online to report, you will need your login details when your payroll software sends your reports through the Government Gateway, which uses the same password and user id as PAYE Online does.
Reports that cannot be submitted directly Using PAYE Online
You will not be able to send us any of these reports by logging in directly using PAYE Online:
Getting your employee details ready
It's very important you use accurate employee details, such as full name, home address, date of birth, National Insurance number and gender before the new PAYE real time is introduced within your business. By doing this you will:
What will not change
The following will remain unchanged once you begin reporting PAYE in real time:
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