8 Reasons why HMRC cancel Employer PAYE Schemes

1.             You have made no submissions using PAYE in Real Time
2.             You have not made any payments to HMRC
3.             You are not an annual payer
4.             There is no evidence that you want to claim CIS Deductions Suffered
5.             You have not received an advance from HMRC
6.             You have not had any periods of Construction Industry Liability
7.             There is no evidence that you have had any employees
8.             There is no evidence that Class 1A NIC is due

Where any of these conditions apply your employer scheme will be cancelled and a letter issued to your business address to advise you of the action taken.  Once the scheme has been cancelled you will not be able to submit any PAYE submissions in Real Time.  If your scheme should not have been cancelled the letter covers who you should contact in HMRC to request that your scheme is reopened.

Posted byAnn TigheinHMRCPayroll Software

To Avoid Child Benefit Tax Trap – Parents Must Act Now - HMRC

Although approximately 400,000 people with higher incomes have opted out of receiving Child Benefit, parents on higher incomes who still receive Child Benefit must register with HMRC for self assessment by 5^th October to avoid a steep penalty.

HMRC is currently writing to 2 million high rate taxpayers reminding them that if their income is above £50,000 and they or their partner have received Child Benefit in the tax year 2012/13, they are required to complete a self assessment tax return and pay the High Income Child Benefit tax charge.

If they fail to do so and this was intentional, HMRC says it may levy a penalty of between 10pc and 100pc of the amount due.

Introduced on 7^th January this tax commences when one person earns an annual income of £50,000. Households with one person earning £60,000 or more lose the payment completely. Child Benefit is worth £20.30 a week for the first child and £13.40 a week for every sibling.

HMRC estimates around 600,000 people will be affected by the charge, which has been widely criticised as unjust because households where both partners earn £49,000 are able to keep the full payment.

If you opted out from receiving Child Benefit then no further action is required.

A spokesperson for HMRC stated, "HMRC is committed to helping people pay the right amount of tax. If you have had certain changes to your income in the last year, including those affected by the changes to Child Benefit, you have until October 5 to register for self assessment."

Posted byLorraine McEvoyinHMRC

First Quarterly PAYE Payment

Some Brightpay advise on your First Quarterly PAYE Payment which is due 19/22 July 2013

Paying by Cheque:The cheque must be received by last working day (excluding weekends and bank holidays) on or before 19^th July for 1^st PAYE Quarter.

Electronically: Payment must have cleared HMRC bank account by last working day (excluding weekend and bank holidays) on or before 22^nd July.

Amount Payable:

Amount payable is the total amount on an employer’s FPS and EPS for the quarter including any corrections or adjustments submitted on or before 19^th of July 2013.

Any amended or corrected FPS and EPS received after 19^th July (1^st Quarter) will be taken into account in calculating your payment for Quarter 2.

You should also use an EPS to tell HMRC if you have no FPS to send as, without it, HMRC will instead calculate what they believe is due and expect you to pay this in full.

Checking your 2013/14 PAYE position:

An employer can use the HMRC online PAYE Liabilities & Payments Viewer (also known as the Business Tax Dashboard) to confirm the real time submissions that HMRC have received and to see both what the employer owes and what they have paid.

Please be aware that the Viewer might not show the most up-to-date position for:

Amount employer owes to HMRC - the Viewer’s ‘Amount due in period’ figure is updated on the 6th and 20th of each month, based on all submissions received to those dates. Any submissions made between these dates will not be reflected until the next update.

What an employer has paid HMRC – there is a slight delay in the payment information reaching the Viewer. Any very recent payments an employer has made may not be shown.

Please note that, even if the employer is a quarterly payer, HMRC will still raise monthly charges. The charges will either be based on the reports the employer has submitted, or where HMRC have estimated what the employer owes. These charges will be reflected on the Viewer, and will be shown as outstanding even if they are not yet due for payment.

Check out your HMRC Payments Record in Brightpay.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byAnn TigheinHMRCPAYEPayrollPayroll SoftwareReal time informationRTI

Employers Requesting Annual PAYE Payment Scheme

HMRC have confirmed that they have received a number of requests since April 2013 from employers asking to change to annual payment scheme for PAYE.

At the moment they are unable to process requests from employers to:

• · Move to paying annually and register as an annual scheme
• · Change their payment frequency

There will be a fix for this by the end of July and this will be confirmed in the “what’s new” section of the HMRC website. In the mean time employers who are not paying employees should submit a nil Employer Payment Submission by the 19^th of each month.
 

When the fix is in place all requests that have been made will be accepted and changed to annual schemes. These employers will be informed on what action they need to take once the fix is in place.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Read more at www.hmrc.gov.uk >

Posted byAudrey MooneyinHMRCPayroll SoftwareRTI

RTI: STARTER PROCESS AMENDED

HMRC has amended its guidance on the starter process to help increase accuracy for individuals with a P45 and more than one job. In such cases, instead of selecting statement C and operating code BR, the employer should select statement B and operate the tax code on the P45 – unless the tax code on the P45 is BR, 0T or D prefix – in which case statement C would still apply.

Individuals without a P45 or with an old P45 will continue to complete the starter declaration to confirm their employment situation. The full guidance on the starter process will be updated and available from 6 April 2013 here.

Please be aware the guidance linked above will not be updated to reflect this change until 6 April 2013. HMRC acknowledges that the starter process guidance has gone through several iterations and for 2013-14 says it will accept if an employer’s payroll does not follow this new process.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Read more at www.hmrc.gov.uk >

Posted byAnn TigheinHMRCPAYEPayrollPayroll SoftwarePRSIRTISMEWages

BrightPay 13/14 is Now Available

We are delighted to announce that BrightPay 13/14 has obtained full HMRC recognition for RTI submissions and is now available to download.

Preparing for RTI

From 6th April, all payments to employees must be reported to HMRC using RTI. Although we have worked hard to make your RTI experience with BrightPay as painless as possible, there are a few things you need to do before your first 13/14 payroll run to ensure that it all runs smoothly.

1. Make sure that all employees are included in your payroll before you send your first RTI submission.

   • If you run payroll for both weekly and monthly employees, your first weekly FPS submission will include the employment details for the monthly staff, even if they have not yet been paid.
   • If you have imported from BrightPay 12/13 and an employee joins in 12/13 after the import, make sure you add this employee to your 13/14 payroll.
   • Unlike previous years, you must include all employees, including nannies and domestic staff, casual employees, part-time staff, students working in their vacation and those below the Lower Earnings Limit.
2. Make sure you know your Accounts Office Reference as HMRC requires this to be included in RTI submissions. If you have your yellow Employer Payment Booklet issued by HMRC, the Accounts Office Reference will be on the front cover in the top right hand corner. Here is a useful link on the HMRC website to help you find your Accounts Office Reference.
3. In so far as possible, try to ensure that the information you have entered in BrightPay for each of your employees is accurate. To help with this, we have created a Request Form that you can have your employees complete and return to you.

RTI Examples

It is important that you understand how BrightPay handles Full Payment Submissions (FPS) and in particular your first FPS which acts as an alignment submission. This understanding is best served by a couple of examples.

One of the really nice things about BrightPay is that until an RTI submission is sent, it will be automatically updated with any changes you make to employer, employee or payment details. Let's say you only add your monthly paid employees in BrightPay after already finalising your first week. In this case, the pending first FPS will be automatically updated to include the details for the monthly employees. Similarly, if you discover that the NINO for one of your employees is incorrect, you can simply correct the employee record and the pending FPS will be automatically updated with the correct NINO. You do not have to process the payroll again or prepare the FPS again for these changes to be made.

The same automatic updating applies to other RTI submission types as well (EAS, NVR and EPS). Once they are created and until they are sent, any changes you make to employer or employee information will be automatically applied.

Reporting and Paying HMRC in Real Time: Getting it Right

HMRC have published a useful one page leaflet entitled "Reporting and paying HMRC in real time: getting it right". Download it here.

Any Questions?

We will be delighted to help you with any questions you may have. You can call us on 0845 3004304.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byPaul ByrneinHMRCPAYEPayroll SoftwarePRSIRTIWages

RTI - a one minute overview

BrightPay obtains HMRC Recognition for 2013/14 - see HMRC listing

The following video shows just how easy RTI is when using BrightPay.

Watch our BrightPay introductory video

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byPaul ByrneinHMRCPayroll SoftwareRTI

RTI – Frequently Asked Questions

The 2013/14 tax year is almost here, and with it, Real Time Information (RTI). From 6th April 2013, employers will report their payroll information to HMRC in real time, on or before every payday.

BrightPay 2013/14, with full RTI support, will be available soon. Over the past few months, we have been asked several questions about RTI, and how it will work in BrightPay. Below are some of the common questions and answers.

When will BrightPay 2013/14 with full RTI functionality be available?

BrightPay 2013/14 will be released on Tuesday, 19th March, 2013.

When can I start sending RTI submissions?

On or after 6th April 2013. HMRC will not accept any RTI submissions sent before 6th April. This will not stop you from processing your payroll using BrightPay. If you process payroll before 6th April, BrightPay will prepare and save any required RTI submissions. From 6th April, you will be then able to send them.

What will my first RTI submission be?

Your first RTI submission will be due on or before your first payday in the 2013/14 tax year.

If you have 250 employees or more, your first submission must be an Employee Alignment Submission (EAS), which simply contains the details of all your employees, allowing HMRC to align their records with yours. BrightPay will detect if you have 250 or more employees, and guide you through submitting an EAS.

If you have less than 250 employees, you do not need to send an EAS (although you still can if you choose to). Instead, HMRC will align their records with yours when you send your first Full Payment Submission (FPS). An FPS is sent on or before each payday, and informs HMRC about the payments and deductions for each employee. BrightPay automatically prepares an FPS each time you finalise one or more payslips. If you did not send an EAS, BrightPay will include all the necessary alignment details in your first FPS, which includes a listing of all your employees, whether they were paid in the first pay period or not.

So, before you send your first RTI submission (be it an EAS or first FPS), it is very important that you first ensure all individuals in your employment are included in BrightPay. This includes temporary and casual workers, as well as employees paid below the LEL (Lower Earnings Limit) who, though they may have no deductions, now need to be accounted for through the payroll.

What information will be sent to HMRC on each payday?

Each time you pay your employees, you will send a Full Payment Submission (FPS) to HMRC. BrightPay will prepare an FPS each time you finalise one or more payslips.

An FPS contains:

• employer registration details (PAYE reference, Accounts Office reference, etc.)
• personal identifiable details for each employee (name, address, NINO, date of birth, gender, etc.)
• employment details for each employee (directorship, starter information, leaver information, etc.)
• year to date figures for each employee (tax, NICs, Student Loan deductions, pension contributions, statutory pay, etc.)
• figures for the relevant period for each employee (payment date, gross pay, an estimation of hours worked, indication of unpaid absence or strike, etc.)

If no employees are paid on a particular payday, an FPS is not required. Instead, BrightPay will notify HMRC of this in your next Employer Payment Summary (EPS) submission (which is otherwise used to notify HMRC of reductions you are entitled to make to the totals already submitted on FPS submissions e.g. statutory parenting pay).

Is there any new information in the FPS that I haven't had to send to HMRC before?

There are a few new pieces of information that were not previously included in P45, P46, P35 or P14 submissions:

• An estimation of hours worked. Either (a) Up to 15.99 hours per week (b) 16-29.99 hours per week or (c) 30 hours or more per week. For employees who are paid using an hourly rate only, BrightPay will select the correct option automatically. For employees paid a set amount each week or month, you will need to choose the appropriate option (BrightPay, by default, will use (c) 30 hours or more per week)
• An indication that the employee is on an irregular payment pattern. For example, this would apply to casual or seasonal employees (where the employment contract continues) or where the employee will not be paid for at least a further three months but is still in your employment (e.g.parenting/sabbatical leave). Setting this indicator will ensure that HMRC does not assume an employee has left your employment.

What if the information I send in an FPS is incorrect?

You've just sent an FPS, only to realise that you forgot to include overtime! This, and other accidents which affect the amounts reported on an FPS, could happen to you, and will most certainly happen to many other employers.

HMRC are aware of this possibility, and are flexible in how you handle it. You can re-send the FPS with correct figures, or you can continue anyway, and in the next FPS the year to date figures will be reconciled. BrightPay will cater for either approach.

If, after 19th April 2014, you realise that the information on your final FPS was incorrect, BrightPay will let you submit an Earlier Year Update (EYU) submission to make the adjustments as required.

Do I still need to send a P45 for an employee who is leaving (and a P45 Part 3 or P46 for a new start)?

No. BrightPay will automatically include starter and leaver details in relevant FPS submissions. With RTI, HMRC will already have the details of an employee's previous employment, and so there is now much less information about an employee's previous employment that you need to record in BrightPay.

But there is an important change to the process of recording an employee's start or leave date in BrightPay. Before RTI, a P45 Part 3 or P46 could be sent to HMRC up to 30 days after the employee started. Similarly, a P45 could be sent up to 30 days after an employee left. It was common (and perfectly acceptable) that an employer would notify HMRC only after making a first or final payment. But with RTI, you need to ensure that the start/leave date is set before sending the first or final FPS. To help ensure that you do this, BrightPay now allows you to confirm starter/leaver details when finalising payslips.

You will, however, still be required to provide a P45 copy to your employee when they leave, for their own records. BrightPay will still allow you to print this (or export it to PDF) as before.

What about the end of the tax year? Is a P35/P14 required?

The P35 and P14 are no longer applicable. Your final FPS (and/or EPS) will contain the end of year declarations that were previously included on the P35, as well as the final payment figures for each employee that were previously included on P14 forms.

How did the RTI pilot in 2012/13 go? Were there any lessons learnt by HMRC and/or employers?

For the most part, it went well, and was a very worthwhile exercise. Lots of issues were ironed out on both sides, ensuring that RTI in 2013/14 is as smooth as possible for the rest of us!

One of the main lessons learnt by employers was that information for each employee (name, address, date of birth, NINO, gender) should be accurate and up to date from the very start of the tax year. If it's not, or if you change employee information mid-year, HMRC may not be able to align their records with yours, creating big headaches for you and your affected employee(s).

To help resolve this problem in 12/13, HMRC introduced a Payroll ID for each employee, which they suggested should be the employee's Works Number. But Works Numbers can change. And so some difficulties were faced when HMRC incorrectly inferred a change in Works Number to be a new employment. In 13/14, BrightPay, along with many other software providers, will leave the Works Number alone, and automatically assign a unique Payroll ID for each employment.

Will there be an additional charge for RTI functionality in BrightPay 2013/14?

No.

With RTI, payroll is changing, but our simple pricing model and free support is not. Rest assured that once you have purchased a 2013/14 BrightPay licence, that's it.

Does BrightPay 2013/14 have HMRC Software Recognition?

BrightPay received full recognition in 2012/13, and we are in the process of being tested for 2013/14 recognition. HMRC have advised us that there may be delays in processing applications for 2013/14 recognition. Keep an eye on our website for updates.

If you have any more questions, please call or email us. We are confident that RTI will be easy with BrightPay 13/14

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byRoss WebsterinHMRCRTI

Preparing for RTI

RTI may seem pretty scary but BrightPay will look after all the heavy lifting. We hope that you will be pleasantly surprised at just how easy and unintrusive you will find the whole RTI experience.

There are one or two things you need to consider in preparation for RTI.

Your first RTI submission, which will occur on or before your first payday in 2013-14 (but not before 6th April 2013) is known as your "first full payment submission" or first FPS for short. BrightPay, as with all RTI submissions, will prepare and submit this first FPS automatically for you, with your OK of course. The difference between the first FPS and subsequent FPS submissions is that the first FPS will include details of all employees whether or not they were included in your first payroll run e.g. if you operate both weekly and monthly payrolls for the same company, the first FPS, triggered by the first weekly payroll run, will include details of all your monthly paid employees (even though they will have zero in all the pay and tax fields). Subsequent FPS submissions will only include details for employees actually paid in the applicable payroll run.

Therefore it is important that all individuals currently in your employment are included in BrightPay before the first RTI submission is made.

Another thing to bear in mind is that each RTI submission will need to include information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit. So, even though there are no deductions made from these individuals, they now need to be accounted for through BrightPay.

Finally, you will need to include new information in your payroll records, the main one being hours worked. This is not the actual number of hours but, instead, an applicable scale (a) Up to 15.99 hours per week (b) 16-29.99 hours per week or (c) 30 hours or more per week. For employees who are paid using an hourly rate, BrightPay will allocate this scale automatically. However, for employees paid a set amount each week or month, you will need to review the default scale which is set at (c) above.

One other new item is the "Irregular Employment Pattern Indicator" e.g. casual or seasonal employees (where the employment contract continues) or where employee will not be paid for at least a further 3 months but is still regarded as an employee e.g. maternity

If you are running a payroll bureau service, you need to consider procedural changes to ensure that the above issues are covered. Make sure that these changes are put in place well in advance of the 6th April.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byPaul ByrneinHMRCPayrollRTI

RTI - New Employers may opt out

From 05th November new employers registering with HMRC will automatically join RTI by default.

There will be instances where employers will not want to join RTI immediately therefore employers can opt out.  Reasons for opting out may include;

• The employer already operates other PAYE schemes
• They may wish to use software from a company which is not yet RTI ready
• The employer indicates that they are entitled to claim exemption from online filing and will need to operate PAYE manually. Exemptions will be considered in line with current guidance

These opt outs will only be available between 5 November 2012 and 5 April 2013.

Further information is available from HMRC at http://www.hmrc.gov.uk/manuals/pommanual/PAYE5011.htm

BrightPay 2013/14 will be RTI ready. All necessary functionality to operate RTI for your payroll will be provided in the same simple and user-friendly manner you've come to expect. BrightPay 2013/14 will be available to download for new and existing customers before April 2013. We'll keep you up to date between now and then with the latest information, including an overview of how RTI will work in BrightPay 2013/14.

Please be assured that there will be NO price increase for BrightPay 2013/14 or additional charges for RTI functionality.

Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.

Posted byKaren McDarbyinHMRCPAYEPRSIRTI