I'm coming to this late

I'm coming to RTI rather late in the day, but a friend who runs a small business and whom I occasionally help (for free) has asked me to explain RTI to him and help him with set up.  In his case it will be relatively easy in practice as he has no staff turnover (the same half dozen employees have been with him for over a decade) and he has full names, addresses, NINOs, etc even for the cleaner (2 hours per week).  Just one payroll, run monthly.  Everybody on a (pretty) fixed monthly salary (plus occasional overtime hours).  No oddities like SMP - not even a student loan in sight.

But I do wonder how some other employers are going to cope with this (and other changes on the horizon).

In a perfect world it would run great - but in the real world . . .

I foresee payrollmageddon!!  Or perhaps a return to the old days - cash in hand, no paperwork!

David

Comments
taxhound's picture

Just don't ask

taxhound | | Permalink

I regularly wake up in a cold sweat worrying about it.  In a perfect world it would be fantastic.  In the real world I can only predict disaster.  I think I may have to ditch all of my other work and just do payroll from April to cope with it.

Paul Scholes's picture

Think I'm missing something

Paul Scholes | | Permalink

I agree that RTI rings the death for manual payroll systems but other than the initial setup, to ensure your employee details match with HMRC's, and that software is so cheap for this, I'm not sure what the fuss is about.

I'll be a bit miffed if I have to process 12 monthly sums rather than my one annual salary but, overall, given the grief I have dealing with incorrect codings, that should now ease, so I can't see it as being doom & gloom.

What have I missed?

taxhound's picture

changes, amendments etc general messing about    1 thanks

taxhound | | Permalink

Do your clients not email you a day after payroll run and say - I forgot so and so's bonus etc etc etc.  If payroll is as inflexible as VAT (ie you can't amend an on line filing) there are going to be letters flying all over the place with amendments in them, given that you have to file before you pay the staff.

Maybe I am a pessimist but I just can't see it working well across the board.  Probably ok for say 90% of employers but a mess for the other 10%.

Paul Scholes's picture

Thanks taxhound

Paul Scholes | | Permalink

No, fortunately, I divested myself of all payroll work 2 years ago, there are some things I will not do for clients!  But, I didn't realise that submissions could not be corrected, so thanks for that.

Given that the current system has been in for over 60 years it was time for a change and, as we all know, change brings loss & gain so I'll stay on the glass half-full side hoping they refine it after experience.

 

davidwinch's picture

New employees

davidwinch | | Permalink

As I understand it online submission to HMRC under RTI has to be completed no later than the date on the employee's payslip and data for EVERY employee on the payroll has to be submitted to HMRC (even temps and part-timers).  (No more P38A or P38(S) people.)  The first time a new employee appears on the RTI submission HMRC's computer will check whether it 'recognises' the new employee as an individual with an existing tax record (presumably by reference to NINO, name and date of birth).

If it does, fine.

If it does not, it will create a record for this new individual.

Of course if the employer has (for whatever reason) got the wrong NINO on the payslip, or if the employer has no NINO and has submitted full name and date of birth (and passport number if known) and this does not exactly match an existing individual on the HMRC database then you are likely to now have two separate HMRC computer records for the same person.

Imagine the grief that could cause.  Then think about the number of employees who come and go - and may fail to supply their new employer with full details before their first pay day!

David

memyself-eye's picture

we do payroll

memyself-eye | | Permalink

For a pub with infinitely variable weekly paid staff where the payroll is run on monday am and the staff are paid monday pm in cash. Won't that be fun.........

low paid part-timers

pauljgoodman | | Permalink

I can't quite get my head round the fact that if not one of your part-timers is paid over the LEL, then you actually don't need to operate a scheme at all, and so HMRC will have no information from the employer concerning their income.  But if one of these is paid over the limit for some reason, suddenly you need a scheme, and everyone's pay needs to be reported.

I have just one such client, who pays her part-timers weekly. It's tempting to get the scheme closed, to avoid RTI completely.  But if it is suddenly needed again in mid-year.............

 

I

Approval prior to submission and weekly paid    1 thanks

Jimess | | Permalink

I am struggling with how we are going to get payroll approved by clients with weekly paid employees prior to date of payment.  Given that some of our clients with weekly paid employees struggle to organise themselves sufficiently so that we always end up doing the payroll on the day of payment, I am really failing to come up with any positive ideas on how on earth are we going to satisfy that requirement. I am thinking that I may have to employ my payroll person for an extra day/half day per week just to cover the submissions. I can also hear the woes and wails when we tell clients that their employees will have to wait a week for the couple of hours overtime or the pay increase they forgot to tell us about.  I have a nursing home client that changes the payroll two or three times every payroll run for things they "forgot" to tell us.  It is going to be unworkable for them and for us.  For the amount of money we get paid for doing payroll work I can see that it is not going to be profitable work at all unless we can structure in pay increases for the weekly/monthly submissions and perhaps would be best outsourced.  Has anyone else had any similar thoughts?

RTI and CIS

jane@lymmtax.co.uk | | Permalink

Does anyone know if RTI applies to CIS payments. I had previously thought not but I saw something recently which made it worry that that it does.

PAYROLLOXFORD's picture

Approval prior to submission and weekly paid    2 thanks

PAYROLLOXFORD | | Permalink

Jimess - I have every sympathy with you.    I am sure we all have some clients whose disorganisation causes the disruptions you mention.   My main concern was that we did not end up taking the blame for new employees not being paid (due to insufficient info on their starter form - or no starter form at all) and overtime/commissions etc not being paid because the information was not available on the cut off date.    As far as the re-runs are concerned, I think the only realistic way to prevent this "forgetting" is to charge for every re-run.   Apart from that it is down to education, education, education.    We'll be sending out emails, newsletters and more emails with the new cut-off dates applicable from next April.   Like you, we often have had to process payrolls on payday for some clients, but no more!     It is too stressful and RTI is just one stress too much.   If 80% of our clients can manage in a timely manner then there is no reason why the other 20% shouldn't also.    As far as approval is concerned, we currently attach reports and payslips to an email which says " Kindly check the reports and let us know straight away if you require the payroll to be re-run.   As part of the RTI pilot scheme the file will be submitted to HMRC tomorrow unless we hear from you by return."

Good Luck:)

TomMcClelland's picture

RTI does not apply to CIS

TomMcClelland | | Permalink

<a href="mailto:jane@lymmtax.co.uk" rel="nofollow">jane@lymmtax.co.uk</a> wrote:

Does anyone know if RTI applies to CIS payments. I had previously thought not but I saw something recently which made it worry that that it does.

You must not file payments to subcontractors via RTI.

THe only RTI connection with CIS is that you should enter the total CIS suffered on a monthly EPS if your business is a Ltd that does CIS work for its clients and suffers deductions. Previously this was a single annual entry on the P35.

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Gathering place for those with an interest in RTI for PAYE.