The Biggest Shake up to payroll in years – Are you ready?

Introducing RTI

[youtube]http://www.youtube.com/watch?v=KkN7tp1QAUM[/youtube]

If you employ staff, even if it just you as one employee, you will are affected by one of the most radical changes in your reporting and filing obligations for many years.

Up until 2013 you were required to calculate your payroll, pay your staff, and pay the payroll taxes each month (or every 3 months) for some.

Nothing else needed to be done until the end of the tax year when you, your bookkeeper or accountant then completed an Employer Annual Return (P35 as they are commonly known) which had to be received by the Revenue before 19^th May.

Any money that was due had to be paid up by that date also. The loophole was that if you were struggling to pay the tax each month, as long as something was paid, the Revenue was none the wiser it was behind, until they received the Employer Annual Return. And as long as you had paid everything up to date by then you were usually ok.

Now for the shakeup

From April 2013 you are required to not only calculate payroll, pay staff, and pay payroll taxes but IN ADDITION you must inform the revenue (i.e. file a return effectively) each time you pay someone. Hence the name: Real Time Information (RTI).  So no more Annual Returns.

Why are they doing this?

1. The intention is to modernise the Pay as you earn system to reflect how we live today.
2. With people moving jobs more regularly and having more than one job the chances of paying the wrong tax was high
3. Though not advertised as such, let’s tell it like it is, the Revenue needs to find ways to improve its own cashflow and Real Time Information will make accurately identifying outstanding payroll taxes easier.

• For those that delayed payment regularly this could cause a cash flow headache so being on top of your money is going to be even more crucial.
• Your software also needs to be RTI ready to enable you to do the regular returns.

If the thought of this leaves with a major migraine then a good bookkeeper is what you need.

If you know people who employ staff, send them the link to this page, they may not be as clued up as you and not knowing is not a defence as we know.

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