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This podcast selection is taken from a series of Business Hub radio shows broadcast on Star FM between February 2011 and October 2014 with advice from basic book-keeping through to crowd funding, directors loans, cashflow and a whole lot more!

There's something for everyone so do feel free to download and share - it might just be the golden nugget of information you need for your business to succeed!Listen at Star 107.9 FM

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Business Trouble - your choices

Are you prepared for RTI?

The Business Hub Show - 27 January 2013

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Mark
What is RTI Garry, how can I be prepared for this when I'm not even sure what it is?

Garry
Well, we touched on this back in September … it is the biggest change to the payroll and PAYE system since it was introduced in 1944.
RTI stands for 'Real Time Information' and it means that employers when running their payrolls will have to tell HMRC about PAYE payments at the time they are made as part of their payroll process. Payroll software will collect the necessary information and send it to HMRC Online. So you will submit information about PAYE payments throughout the year as part of your payroll process, rather than at the end of the year as you do now.
This will mean the end of things like the P35 and a “payroll year end” as all the information is collected throughout the year.
The change is effective from April 2013 for almost all employers, which is not now that far away as it is the beginning of the next tax year, so employers now do not have a lot of time to prepare and ensure they are able to work with the new system.

Mark
It sounds like a lot of work?

Garry
It is interesting you should say that as I have seen a lot of hype suggesting it is a lot of additional work and will create all manner of problems – but I do not believe that is the case.
If you run your own payroll in house you will have to ensure your software is fully up to date and compliant. If you are using a reputable software provider that really should already be available. In fact we have been running a pilot with HMRC already for a number of months.
The other thing you must do is ensure your information is complete and accurate – hours, NI numbers, DOB, addresses, etc.
Then you should be good to go.
There will be some additional set up to ensure your link with HMRC works – but chances are you are already using the Government Gateway.
So, I am confused when people say it will be a big issue.
If you don’t feel up to it you can always outsource your payroll, if you don’t already. If you do then you should check your provider is on top of the game.

Mark
So, is there a catch?

Garry
Yes!
Presently everything is done on a annual basis. HMRC only really know your payroll position after you submit the year end P35 return in April/May each year. With RTI they will know each time you run a payroll what the figures are. They will therefore know how much is due to them and when, something which they don’t currently have.
Therefore if you don’t pay the right amount over for your PAYE and NIC deductions the following month they will immediately know.
A lot of commentators are suggesting this could cause HMRC to take action against those companies who are not paying over all of the deductions each month because of cashflow difficulties, and it will also pick up on those not dealing with payroll correctly.
It could be a big issue.

 

Mark
What should they do - will it go away if they ignore it?

Garry
Deal with it urgently. Talk to their Accountant or Payroll Bureau, and ensure you can comply, and do it now!

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