REAL-TIME PAYE REPORTING will commence nationally from Saturday 6 April in the biggest shake-up to the system since 1944.
The changes will see PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year.
Changes in circumstances – such as a pay rise, promotion or departure from job – will be reported as they happen. Currently, the system processes the payroll details of four million individuals, whose employers joined the pilot which has been running since April 2012.
Several key government policies, including the introduction of Universal Credit and the £2,000 National Insurance allowance for employers announced in this year’s budget are dependent on the ability to calculate PAYE in real-time.
Last month, it was announced HM Revenue & Customs has temporarily eased the new real-time PAYE requirements for small businesses after institutes warned the smallest businesses would struggle to meet the requirements.
The ‘easement’ means businesses employing fewer than 50 people struggling with increased frequency of PAYE filings to HMRC will be permitted to continue to file their payrolls monthly until 5 October.
That relaxation came after ICAEW tax faculty head Frank Haskew and chairman Paul Aplin had warned the requirements are “at best, unrealistic and at worst, impossible” for small businesses in evidence provided to the cross-party Treasury Committee in November 2012.
Exchequer secretary to the Treasury David Gauke hailed the move as one which will “bring PAYE into the 21st century”.
HMRC director-general for personal tax Ruth Owen was keen to stress that 2013/14 will be a “year of transition”.
“We understand it may take some time before all employers will get into the routine of real time reporting. But HMRC is here to give help and support, including offering free software for employers with nine or fewer employees, regular live Twitter Q&As, YouTube videos and roadshows across the country,” she said.
That transition, though, could be disrupted early on following this week’s announcement of strikes over pensions across the civil service, which will see members of the Public and Commercial Services Union walk out in half-day increments from today (5 April) until Monday 8 April.
HM Revenue & Customs members will strike on Monday morning, with the expressed intention of disrupting the new tax year and the introduction of real-time PAYE.
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