With one month to go before the introduction of real time information for PAYE, the chairman of the ICAEW Tax Faculty’s technical committee urged HMRC to let employers submit payroll information monthly rather than when payments are made.
When the great majority of employers go into RTI in April they will be required to submit electronic information about tax and national insurance they deduct from employees’ wages to the Revenue “on or before” the payments are made - rather than compiling the end of year summary returns, as is currently the case.
In response to lobbying by the ICAEW and other groups HMRC relented and will now allow some exceptions to the on or before rule (HMRC PDF guide) to let affected companies submit payroll payment and deduction data up to seven days after they are made.
But Paul Aplin, chairman of the faculty’s technical committee, said the change does not go far enough and many employers will see a big increase in payroll paperwork.
“Consider the client with a monthly payroll and some low paid employees who get a weekly advance,” Aplin wrote in February in an article for Taxation magazine. “If the advance is on account of pay and not a loan, there is an obligation to report within seven days. Twelve payroll runs a year has just become 52.”