Time to get ready for tax changes

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With less than one month to go until the start of the biggest shake up of the Pay As You Earn (PAYE) system in nearly 70 years, HM Revenue and Customs (HMRC) is urging Scottish employers to get ready.

From April 6, employers will be required to move to a new way of reporting PAYE called Real Time Information (RTI), where they report each time they pay employees, rather than annually. This updates the PAYE system so that it is quicker, easier and more accurate.

For employees, particularly the one million people in the UK with multiple jobs, RTI will bring benefits as HMRC starts to get details of their tax every time their wages are paid, rather than just once a year.

This will make HMRC’s records more accurate and up-to-date and will begin to reduce the number of cases where someone is found to have under or overpaid tax during the year.

For the vast majority of employers, the first real time return will be the first employee payday on or after April 6, 2013. In order to make sure that employers are ready for RTI they should follow these three simple steps:

1 - Go to HMRC’s website – www.hmrc.gov.uk/rti – for comprehensive information about RTI, including how to prepare, payroll software options and tips.

2 - Acquire new or updated software. Employers will need to talk to their payroll software provider or payroll service-provider (and their Bacs software or solution supplier if they pay via Bacs).

3 - Start checking and updating employee information. It is vital that the information employers have about their employees is up to date.

HMRC is offering a range of help for businesses to prepare for the change, including free software for employers with nine or fewer employees, targeted flyers and emails, regular live Twitter Q&As, YouTube videos and roadshows across the country.