Post by nickd on Oct 7, 2012 18:56:48 GMT 1
Universal Credit looms....
Employers 'blissfully unaware' warns KPMG
"Employers set to receive letters from HMRC as biggest PAYE shake-up for 60 years looms, says KPMG"
"HMRC to write to all employers in the UK next month to outline key changes to PAYE reporting coming in next April"
Here's what KPMG have to say on what employers can expect in the next month or so:
"PAYE data will need to be reported on or after payments are made as opposed to after the end of the tax year
Shake-up is designed to support the Universal Benefit’s introduction next year
Almost all employers in the UK are set to receive a letter from the tax authorities next month outlining key changes to PAYE reporting. The tax authorities unveiled the plans to write to employers in HMRC’s latest “Employer Bulletin” issued this week. And according to the employment tax team at KPMG in the UK, receiving this letter is likely to be the first that some employers know of the most radical shake up to the PAYE system in over 60 years.
Between April 2013 and October 2013 virtually all employers and pension providers will start reporting payroll information to HMRC in “real time” ie on or before every payday – instead of after the end of the tax year, as is the current situation.
Employers reporting PAYE information to HMRC in real time will play an important role in supporting the introduction of Universal Credit by the Department for Work and Pensions (DWP), which is due to be rolled out across the country from October 2013.
Steve Wade, employment tax director at KPMG in the UK, said: “Moving to real-time information (RTI) reporting in which employers send payroll information to HMRC on or before every payday instead of after the end of the tax year is an enormous change. In the main, the larger employers are putting plans in place, or at least thinking about it. But many small and medium-sized businesses are likely to be blissfully unaware of this radical change. If they have up to date payroll software, hold current and accurate employee data and their software provider is gearing up for the more to real-time reporting then they may find that the transition is smooth. But if not, they are likely to face significant problems complying and may incur penalties.”
The latest HMRC employer bulletin contains detailed information about the forthcoming change to real-time information reporting, together with some case studies arising from a pilot programme run by the tax authorities with a number of employers. However, each employer will face different issues, so planning early is important. Steve Wade concludes:
“Employers across the country from the smallest to the largest need to get their heads around what the move to real-time information reporting means for them and how they are going to comply with the new rules. The letters from HMRC next month are just the beginning of the process. They need to have a good look at their current payroll systems and think about the steps they need to take between now and next April.”Link to KPMG article here
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.[/i]
Employers 'blissfully unaware' warns KPMG
"Employers set to receive letters from HMRC as biggest PAYE shake-up for 60 years looms, says KPMG"
"HMRC to write to all employers in the UK next month to outline key changes to PAYE reporting coming in next April"
Here's what KPMG have to say on what employers can expect in the next month or so:
"PAYE data will need to be reported on or after payments are made as opposed to after the end of the tax year
Shake-up is designed to support the Universal Benefit’s introduction next year
Almost all employers in the UK are set to receive a letter from the tax authorities next month outlining key changes to PAYE reporting. The tax authorities unveiled the plans to write to employers in HMRC’s latest “Employer Bulletin” issued this week. And according to the employment tax team at KPMG in the UK, receiving this letter is likely to be the first that some employers know of the most radical shake up to the PAYE system in over 60 years.
Between April 2013 and October 2013 virtually all employers and pension providers will start reporting payroll information to HMRC in “real time” ie on or before every payday – instead of after the end of the tax year, as is the current situation.
Employers reporting PAYE information to HMRC in real time will play an important role in supporting the introduction of Universal Credit by the Department for Work and Pensions (DWP), which is due to be rolled out across the country from October 2013.
Steve Wade, employment tax director at KPMG in the UK, said: “Moving to real-time information (RTI) reporting in which employers send payroll information to HMRC on or before every payday instead of after the end of the tax year is an enormous change. In the main, the larger employers are putting plans in place, or at least thinking about it. But many small and medium-sized businesses are likely to be blissfully unaware of this radical change. If they have up to date payroll software, hold current and accurate employee data and their software provider is gearing up for the more to real-time reporting then they may find that the transition is smooth. But if not, they are likely to face significant problems complying and may incur penalties.”
The latest HMRC employer bulletin contains detailed information about the forthcoming change to real-time information reporting, together with some case studies arising from a pilot programme run by the tax authorities with a number of employers. However, each employer will face different issues, so planning early is important. Steve Wade concludes:
“Employers across the country from the smallest to the largest need to get their heads around what the move to real-time information reporting means for them and how they are going to comply with the new rules. The letters from HMRC next month are just the beginning of the process. They need to have a good look at their current payroll systems and think about the steps they need to take between now and next April.”Link to KPMG article here
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.[/i]