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1 in 3 small businesses not aware of impact of Real Time Information

Posted in: Employing people, Real Time Information (RTI)
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We’re holding a series of workshops to help UK businesses get to grips with RTI and how it will impact the way businesses operate. The seminars are available to all businesses and places can be booked here.

What is Real Time Information?

When Real Time Informatin (RTI) is introduced from April 2013, it will require We're ready for RTIemployers to start providing employee PAYE, National Insurance and Student Loan information to HMRC at the point of payment every month, rather than just at year end.

The impact of RTI on your business

Its introduction represents one of the most fundamental changes to payroll and small business reporting requirements since 1944, but despite the imminent change one in three UK firms are still not aware of what RTI will mean for them. Furthermore, only one in ten of the 1,100 businesses we surveyed recognised the positive impact RTI can have on their organisation, with nearly half (43%) feeling that the changes will increase rather than lessen administrative burden.

The good news for our SageCover customers is that we’ll ensure that you have everything you need to keep you compliant and support you through the transition.

Act now

Although we have seen increased awareness for RTI over the last year, it is still concerning that so many businesses are unaware of the changes and the implementation this will have to their firm.  RTI will impact all businesses, regardless of their size, and with its introduction firms will benefit by streamlining processes, relieving the much dreaded nightmare of Payroll Year End and relieving the increased administrative burden for payroll at this time of year.  We urge that firms act now to not only understand exactly how it will impact their businesses but to adequately prepare for the changes coming into play.

If businesses are aware of the changes early enough and factor it into their plans, then they will be well positioned to take advantage of the benefits of RTI. RTI aims to support the introduction of Universal Credits (i.e. the overhaul of the state benefits system) but also to improve the overall operation of PAYE, by receiving information from employers more regularly, and therefore enabling HMRC to respond more efficiently to errors that lead to the under-or-over payment of tax, which, in time, will help reduce or mitigate fraud.

Get RTI ready

In order to best prepare small businesses should follow some straightforward tips to set up for success:

  1. Find out what the legislative changes will mean to your processes by speaking to your software provider.  This will ensure you continue to pay your employees and HMRC on time, whilst also fulfilling the legislative requirements of submitting more frequently to HMRC
  2. Carry out a full data cleanse on your system, working with your employees to make sure all your data is correct. According to HMRC, THE 2009/10 employer returns showed there are 128 employees called Mr, Ms or Miss Dummy, 572 employees whose surnames ranged from “X” to “XXXXX”, 507 A N Others, 160 Tests, 100 Do Not Use, 75 staff called Casual, 11 Cleaners, nine Workers, six Students and 824 Unknown. Ensure all the information you have is up to date and that the correct names, date of birth and National Insurance numbers for all of your staff are recorded.  If the records you submit do not match those at HMRC, you may trigger the creation of duplicate or inaccurate records which could result in incorrect tax calculations or HMRC compliance checks
  3. Communicate with your employees about how important the information they provide the employer is in ensuring the accuracy of their payroll, so they are educated on the implications of providing inaccurate information
  4.  Store all your business information securely so that you can react quickly to any requests, demands or legislative issues that arise.  Use HMRC recognised payroll software to reduce the burden on doing payroll manually every month; this will help automate processes, mitigate errors and give you peace of mind that you are fully compliant
  5. Make the most of customer service. Some software, including many Sage products such as Sage 50 Payroll, Sage One Payroll and Sage ERP X3 have dedicated help desks for you to contact. Use this facility to check with them that you have all the data you need for your RTI submissions, and remember that all responsibility for paying employees correctly, and in line with RTI, rests with the employer

If you are unsure how RTI impacts you and what you need to do to prepare, then we have lots of other help and advice here www.sage.co.uk/rti

Neilson Watts, Sage Payroll Team

 

Posted in: Employing people, Real Time Information (RTI)
7 comment

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