Correction re Contracted Hours Worked

In a previous article we stated the following in relation to the new contracted hours worked field on the FPS:

"For employees who are paid using an hourly rate only, BrightPay will select the correct option automatically."

This is incorrect. This is the contracted hours that an employee will be expected to work in a week, not the hours actually worked in a week. So for all employees, you will need to choose the appropriate option (BrightPay, by default, will use (c) 30 hours or more per week).

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

Posted byPaul ByrneinPayroll 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

RTI - lessons from the RTI pilot

One of the main lessons learnt from the RTI pilot was that all employee information (name, date of birth, address and valid National Insurance number) should be accurate and up to date.

Click here for a form which you can give to your employees to help cleanse your data.

Another lesson related to the use of Works Numbers or Payroll IDs by HMRC. A change in Works Number sometimes resulted in duplicate records in HMRC's system with a corresponding overstatement of liability. To overcome this potential problem, BrightPay, in common with many other software providers, will treat the Works Number as your own and assign a separate Payroll ID for RTI purposes.

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

Posted byPaul ByrneinPayroll SoftwareRTI

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

Creating RTI-ready payroll software - a BrightPay 2013/14 update

Over the past few months, we have been keeping you up to date on RTI and how it will affect your operations as an employer. You may have already started to prepare for the change.

The RTI development for BrightPay 2013/14 is on track and going well. As the lead software architect for BrightPay, my top priorities are:

1. to ensure that the RTI experience in BrightPay 2013/14 is as seamless and easy to use as possible. We are not just adding an RTI layer of on top of the existing software design, but are instead rethinking the core design where we feel it's necessary to do so to make RTI function as simply and clearly as possible.
2. to ensure that RTI support in BrightPay 2013/14 is in full compliance with HMRC specifications and guidelines. For you, the employer, it should just work or, in the case of an issue, make it very clear what you need to do to make it work.
3. to ensure that BrightPay 2013/14 is completed (and thoroughly tested!) on schedule.

As well as RTI support in BrightPay 2013/14, we're also working on other improvements and new features (including some common customer requests - watch this space!). We're very happy with our progress so far and we will have more updates for you soon. We're really excited about bringing you a better BrightPay.

As always, please feel free to pick up the phone or email us with any queries regarding RTI, or anything else - we are always available for a quick response. Follow us on Twitter (@BrightPayUK) where we try to regularly post useful and helpful information. It might also be worth following HMRC on Twitter (@HMRCgovuk) for additional RTI updates or to take part in one of their popular Twitter Q&A sessions.

The future is Bright for payroll software.

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

Posted byRoss WebsterinRTI

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