How can you comply with the latest changes to the PAYE system? Steve Denham takes a look…
Chris Gamm’s editorial from this week’s Retail Newsagent looks at the challenge the HMRC changes to PAYE have brought to business owners.
While change is nearly always uncomfortable, it would be fair to say that HMRC have not suddenly demanded the new Real Time Information (RTI) reporting system
For the first 15 years that my wife and I owned our store we managed to stay outside the PAYE system by employing part time staff who were earning less than the tax and National Insurance threshold levels. While we kept good records of what we paid them and did all the HMRC paperwork as required, we kept out of collecting tax from our staff.
That all changed when we took on a full time employee and after talking to our accountant I decided to use a computer programme to deal with the challenges that PAYE throws at a small business.
First there was the programme to learn, then the employee data to correctly enter in to it, followed by making sure the weekly payroll happened and was correct with adjustments for holidays and absences etc.
Of course HMRC do have an input with Tax Codes, Student Loan deductions and other employee information including Maternity Pay and Statutory Sick Pay.
PAYE is a steep learning experience for new employers and will be a significant challenge for all the new PAYE intake of 2013. I suspect for these small businesses RTI will be just a small part of their concerns.
I asked betterRetailing.com contributor Jai Singh about how he manages PAYE. “When I initially employed staff I used a computer programme for the first year to deal with the challenges of dealing with the everyday operation of pay and tax,” he said.
“After battling through with this for a few months I talked to my accountant about PAYE and he told me about the payroll bureau service that they offer. I decided that for a few pounds a week the service would relieve me of the worries that the first year’s experience of doing it myself gave me.”
“All I do is to advise the bureau of any amendment, holidays, absences or change of hours. They provided us with pay slips & pay reports and make all reports to HMRC on our behalf. With the start of RTI I know that I have it covered with my agent ensuring I will have nothing to worry about!”
HMRC are hosing webinars everyday until the 26th of April to help explain the process. Click here to sign up for one or watch the video above for a pre-recorded explanation