Year end procedure in BrightPay

With the introduction of RTI the year end procedure for 13/14 is a simple process. You will no longer need to send a P35 instead a “Final submission” needs to be sent to HMRC.

1.  Complete your payroll for the year, sending your FPS files as normal on or before your pay date, this would need to be done for all pay frequencies you run. You will not be asked when doing these final FPS files that this is your “final submission”, instead we have designed it so you can send you final submission as an EPS.
2.  Before you final submission is sent be sure to send an EPS for statutory payments recovered (if applicable)
3.  The final submission you need to send in the tax year is an EPS file. To create the EPS final submission click the “New” button in the RTI section and select EPS. From the options select “Final Submission” and tick the relevant box e.g if you have p11s to submit etc.
4.  Finally your P60s need to be printed and given to your employees.

Posted byAlan KellyinPayroll SoftwareRTI

RTI Penalties delayed to 6th October 2014

HMRC director general personal tax, Ruth Owen, who holds responsibility for the RTI project, has announced “Penalties for late filing of RTI submissions were due to come in from April – that will now start from 6th October this year, so that gives employers through to October to bring everything up to date.

“In terms of automated late-payment penalties they were due to start in April of this year and recognising that people are still getting to understand their charges under RTI we’ve decided to start late payment penalties from 6th April 2015 – so a 12 month delay to those penalties.

“Interest will still apply, so anyone paying late payment interest – this will apply from April 2014, as has always been the case, so no change. We are not delaying interest.

“Also there are some businesses that have been using the concession for ‘on or before’ during this year for whom the concession will not apply from April, so if you are a small but not micro business you will now need to start reporting in real time."

Industry response

The Chartered Institute of Payroll Professionals (CIPP) has been lobbying for a delay in the introduction of RTI penalties as reported here.

Its associate director of policy, research, and strategic visibility, Karen Thomson, said: “The CIPP is delighted the minister, David Gauke, and HMRC has listened to the concerns of the profession and welcomes the delays to the RTI penalty regime.

“This additional time will allow both employers and HMRC to iron out all the teething problems being experienced by employers, particularly around the payment reconciliation process without the fear of financial implications.”

And Paul Aplin, chairman of the ICAEW tax faculty technical committee, said: “I think it is absolutely essential that the penalties are delayed as there have been a number of issues including incorrect demands, difficulty in reconciling amounts and also not all employers are even on RTI now so we have not been through one complete cycle and until we have been through a complete cycle for all employers and until those issues with incorrect demands are sorted it is completely inappropriate to charge penalties.”

Posted byAnn TigheinPayroll SoftwareRTI

Auto enrolment and the small employer

UK businesses with less than 30 employees will be impacted by auto enrolment from the start of 2016.

BrightPay will be a great aid with auto enrolment as it already has all the information required to assess which of your staff should be enrolled and then to handle the pension deductions (and your contributions) in the manner prescribed by the regulations.

Apart from assessing employees and handling deductions, there are numerous additional auto enrolment tasks that BrightPay will help you with. An example of this is producing the letters or emails that must be sent to your employees on enrolment (or postponement).

A month or two before your staging date (the date on which your auto enrolment responsibilities commence), decide which pension provider to use and register with that provider. NEST is probably the most popular scheme as it is government backed and has an obligation to accept employers of all sizes and employees of all earnings. This is different to some schemes who may attempt to cherry pick who they take on.

When your staging date arrives, an hour or two should be sufficient to deal with the following auto enrolment tasks:

• enrolling all relevant employees (i.e. all eligible jobholders)
• communicating as required to all employees
• setting up and commencing employee deductions and employer contributions

BrightPay will guide you through the above tasks.

From that point on it is just a matter of monitoring. The initial month or two after staging you will need to deal with any requests from employees to opt out and any requests from employees, who you were not obliged to enrol, to opt in (or join).

BrightPay will monitor the age and earnings of your staff in each subsequent pay period to see if any further enrolments are required and if any new employees should be enrolled. For most small businesses, these enrolment events will probably happen no more than once or twice a year and each such event should only take a few minutes to process.

A contribution file will need to be submitted after each pay period to the pension provider and payments of all amounts due must be made by 22nd of the following month. This file will be produced by BrightPay in much the same way as RTI files are currently produced.

So, your new payroll workflow will be something like:

1. Process hours, overtime etc.
2. Deal with any enrolment events identified by your software
3. Finalise the pay period
4. Distribute payslips
5. Submit RTI file to HMRC
6. Submit contribution file to the pension provider

Steps 2 and 6 are new.

In conclusion, staging will be a small bit of work but, after that, auto enrolment should become a seamless part of your payroll process.

Posted byPaul ByrneinAuto EnrolmentPayroll SoftwareRTI

New PAYE messages to employers from HMRC from 21st October

From this week HMRC will start to send four types of new messages to employers to help them keep their PAYE up-to-date.

These messages will take two formats:

1. The first three are generic electronic messages to warn the employer that their PAYE submissions and payments appear to have fallen into arrears.

2. The fourth one will be a letter, telling an employer that HMRC are cancelling a PAYE scheme that has been inactive for 120 days.

The electronic messages are not penalty notices and therefore an employer should not appeal against them. These messages do not replace the existing compliance communications, which will continue as now.

The aim of these messages is to help employers comply with their PAYE obligations and in particular get their businesses to submit and pay their PAYE to HMRC on time. This will help them get ready for 6 April 2014 when in-year penalties for late reporting and late payment will replace the current end-of-year PAYE penalties. HMRC wants to receive payments and returns on time; it does not want to charge penalties.

The messages warn that the employer may incur penalties in future, even if they have done nothing wrong for 2013-14 (for example if they are a smaller employer taking advantage of the current relaxation for ‘on or before’ reporting). If this is the case the employer does not need to contact HMRC but they should be preparing for 2014-15.

HMRC will update the wording of these messages in April 2014.

Posted byAnn TigheinPayroll SoftwareRTI

Missed RTI Deadline? – Expect a Letter from HMRC

167,000 employers have missed one or more deadlines for the new RTI reporting system for PAYE income tax.  These employers will now receive a letter from HMRC.

HMRC previously sent a chasing letter to companies that missed a deadline in June, and instructions on how to use RTI were sent in October 2012 and again in February 2013.

Although a few companies may not report because their PAYE scheme is unused or no longer operating, but in these cases employers are still required to let HMRC know by contacting the Employer Helpline.

Certain employers are also required to operate a PAYE scheme for employee expenses and benefits, in this case they should either submit a nil EPS every month, or contact HMRC to change their scheme to annual reporting. The Tax Office will not contact employers who have already registered their PAYE scheme as an annual scheme.

Over 85 percent of employers - 1.6 million employers and 40 million individuals - are now using RTI, with HMRC recently contacting employers via an on-line survey to estimate how companies are coping.

A temporary relaxation for small businesses was recently extended to April 2014 due to manageability concerns as The Institute of Chartered Accountants in England and Wales warned it would be "impossible" for many businesses to comply.

Posted byLorraine McEvoyinPayroll SoftwareRTI

Real Time Information - Reconciling PAYE Charges

HMRC has published a message on their website regarding RTI reconciliation issues.

"We have received feedback that some PAYE schemes have experienced difficulties in reconciling the difference between:

· the tax we say is due, and

· the tax they think is due

We have set up a dedicated team to identify the cause of these discrepancies.

The team is working with a number of PAYE schemes to work through their examples to examine what is causing these discrepancies, and then to resolve them.

This will also enable us to:· understand the issue in greater depth, and · take the steps necessary to prevent them arising in the first place."

Posted byAnn TigheinPayroll SoftwareRTI

Employers Requesting Annual Payment Scheme – Update

Further to our Blog of 4^th July HMRC have now confirmed that they have a fix in place to deal with the requests they have received from employers since April 2013 requesting to change their PAYE scheme to annual. 

All requests that have been made since April will be accepted and those schemes changed to annual schemes. Employers will NOT be notified when that change has been made.

An annual scheme must meet the following criteria:

• All the employees are paid annually
• All the employees are paid within the same, single tax month
• The employer is only required to pay HMRC annually

If you are making an annual payment to an employee using BrightPay remember to tell BrightPay the payment frequency for the FPS is annually, if you have any queries please phone the BrightPay Support Team.

When a business is registered as an annual scheme, the employer is not required to submit an Employer Payment Summary (EPS) for the 11 months of the tax year where no payments are made to the employees.

If an employer that is registered as an annual scheme pays an employee or employees and submits a Full Payment Submission (FPS) for more than a single month in the year HMRC will automatically cancel the annual payer status for that year and the following years and will write to the employer to advise them of same.

Full details can be found on the HMRC Website, http://www.hmrc.gov.uk/news/annual-schemes.htm

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

Posted byAudrey MooneyinPayroll SoftwareRTI

HMRC REVISES MESSAGE ON RTI REPORTING OF HOURS WORKED

Further to our Blog of 22^nd July – HMRC have now revised the message they issued recently about the need for accurate reporting of hours worked.

The original message suggested that employers should record the actual hours worked by employees, however this has now been clarified to indicate that it is the number of hours normally worked. HMRC go on to explain that option D should only be selected if the employee does not have a regular pattern of employment or the payment relates to an occupational pension or annuity. Otherwise, hours worked should be recorded as follows:

A Up to 15.99 hours
B 16 to 29.99 hours
C 30 hours or more

If you have selected 'D other' in earlier submissions but should instead have selected one of the other options, you do not need to resubmit an earlier Full Payment Submission (FPS). Instead, please ensure that you report the correct hours on your next FPS.

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

Posted byAnn TigheinPayroll SoftwareRTI

It is important to record the correct number of hours worked by your employees.

HMRC is urging payroll operators to be careful when reporting the RTI hours worked field so staff do not miss out on any benefits owed to them, especially crucial with the roll out of Universal Credits.

Of particular concern to HMRC is the tendency by some employers to mistakenly use the ‘other’ field rather than selected one of the banded-hours options.

An HMRC spokesman said: “It is important to record the correct number of hours your employees have worked to help ensure that they receive the right amount of benefits and tax credits they are entitled to".

For the RTI project to work successfully, HMRC stresses that use of the ‘other’ field is intended only for individuals with an irregular pattern of employment or where the payment relates to an occupational pension or annuity.

The Revenue is also reminding employers, where staff are paid on a quarterly basis, that it is now time to make their first RTI submission of the current tax year.

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

Posted byAnn TigheinPayroll SoftwareReal time informationRTI

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