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RTI and Paper boys!

RTI and Paper boys!

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Just looking through the HMRC powerpoint slides on the introduction of RTI.

All employees have to go on the payroll. Even those under the LEL. The HMRC expert said that even Paper boys have to go on - NI No. is not a mandatory field.

Will this see the end of Wife's wages up to the LEL being put through by accountants retrospectively?

One of the stated aims of HMRC is for RTI to lessen the Tax Gap. It'll certainly do that.

Replies (16)

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By alattax
08th Aug 2012 21:40

As I understand it a provision can still be made in the accounts for wife's wages which is tax deductible if paid within nine months of the accounts year end. 

RTI reporting is based on the payment date so to be most effective should be within that nine month period.

So it will mean that the record keeping in these circumstances has to be more carefully done, but then reporting under RTI will mean additional evidence of payment. 

 

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By girlofwight
08th Aug 2012 21:51

No bad thing
Rightly or wrongly HMRC will deny relief for spouses wages not recorded in the business records.

Although its a nuisance, the obligation to payroll the amounts will help to confirm deductions IMV.

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By Peter Tucker
08th Aug 2012 22:04

NI Numbers

Just wondering how much consideration HMRC have put into the work that will be involved in dealing with missing or perhaps incorrect NI Numbers?

Paper boys and spouses may not have their NI Number to hand and the logic appears to be that the Employer ( or Payroll ) will get this sorted.

Making it easy for Employers? I suspect that the costs of engaging with RTI will be different from those quoted by the All Party Parliamentary Group on Taxation or those quoted by HMRC?

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Chris M
By mr. mischief
09th Aug 2012 06:24

almighty mess

It will be one almighty mess and everyone knows it except HMRC.  The pilot does not really help them to realise what a mess it will be.

That's because the main thing that will go wrong is HMRC simply won't have the IT resource or personnel to cope with the sheer volume of data being thrown at them, much of it inaccurate.

For my client base, the payrolls I do for clients will be fine.  But I have many who do their own, most are well capable of making assumptions / errors which had never occured to me.  This will be happening all over the country.

As it is the database goes into a quiet corner and cries for between 5 and 15 days every tax year end.  Now potentially it will be doing this every month.

 

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By petersaxton
09th Aug 2012 07:45

Phrase I like

"But I have many who do their own, most are well capable of making assumptions / errors which had never occured to me."

I agree. I recall something I was told that made me laugh at the time but I now know is a standard phrase. You can't make anything idiot-proof because idiots are too clever!"

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By eastangliantaxadvisor
09th Aug 2012 07:48

So will earnings less than the NI limit need to be shown

 

How about wife's wages of £2,000 per year - for a building subby who does not employ anyone else?

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By ACDWebb
09th Aug 2012 09:17

Yes

they will require a report

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By MarionMorrison
09th Aug 2012 10:06

But but but

what if there is no payroll?  Can't see from an admittedly-fleating glance that there is anything that obligates setting up one, where all employees are earning small beer wages.

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Replying to petersaxton:
Me!
By nigelburge
09th Aug 2012 11:12

Quite

MarionMorrison wrote:

what if there is no payroll?  Can't see from an admittedly-fleating glance that there is anything that obligates setting up one, where all employees are earning small beer wages.

From my reading of the legislation and amended regulations, it would appear that if there is no PAYE/NIC deducted (meaning there are no "relevant earnings") AND no PAYE code issued, then there is no need for a PAYE scheme and no need for RTI.

HMRC may say otherwise but that does not make it correct in law. They have often maintained that one needs a PAYE scheme even if all employees are paid under the LEL but even the one of the top PAYE liason officers in HMRC could not justify that to me - I know, 'cos I asked her!!

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By EGo
10th Aug 2012 10:36

RTI if the only employee(s) under LEL

As long as they have no other job etc, so no NI and no PAYE, so no deduction workings sheet have to be prepared for any employees, then the employer does not need a PAYE scheme in which case no RTI submission - see new Regulation 67B(1).

 

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Replying to nick farrow:
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By MarionMorrison
10th Aug 2012 11:30

Phew!

EGo wrote:

As long as they have no other job etc, so no NI and no PAYE, so no deduction workings sheet have to be prepared for any employees, then the employer does not need a PAYE scheme in which case no RTI submission - see new Regulation 67B(1).

 

Paperboys and farmer's wives all over the country will be giving thanks as they return to getting their £5/round or £500/mo without hassles.

How much do paperboys get these days anyway? 

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Nigel Harris
By Nigel Harris
01st Oct 2012 16:02

Thanks EGo

Thanks for that clarification, I too was concerned about having dozens of payrolls with just under LEL employees. Let's beware to HMRC trying to muddy the water on this. I come across the same with other HMRC online filing, especially CT. Just because I could file a nil CT return doesn't mean I should! These online systems are only a mechanism to satisfy the existing regulations, they don't extend them.

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By John Snowden
02nd Oct 2012 07:22

"Wife's" wages

I am quite surprised to read some of the comments above.

I have understood for many years that ensuring "wife's" wages are valid deductible expenses entails evidencing them as such, both by ensuring that there are records of some sort of actual work done, AND putting them through a payroll - deductions or not.

I don't see that it is ok for employers to make assumptions about employees' tax statuses. Even though one might well know that an other half does not have any other job, or will pay any tax due via self assessment, or whatever, we all well know that the vagaries of the PAYE world can lead to unexpected and/or wrong PAYE codes which nevertheless the employer has to implement on pain of penalties for failure.

And if the P46 rules lead to no notification of employment to HMRC and/or no preparation of a P11, it seems to me better to have a payroll in place so the tools are there to work with.

 

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By honesty
07th Oct 2012 15:25

Low earners not listed?

If employees under the LEL are not included in certain circumstances, how will this square with the plan that RTI will be directly linked to the benefits system?  The low earners after all are the beneficiaries.

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By laurencole1986
05th Feb 2013 13:13

But ....

Am I right in thinking that this does not stand anymore because under regulation 67BA (2013) no matter how much anyone earns you will have to have a PAYE scheme and will have to operate RTI?

67BA.

—(1) This regulation applies if an employer makes a relevant payment to an employee in respect of whom the employer is not required by regulation 66 (deductions working sheets) to maintain a deductions working sheet.

(2) The employer need not deliver the information specified in Schedule A1 on or before making the payment.

(3) The employer must deliver that information no later than the earliest of—

(a) the first time after the making of the payment that the employer makes a payment ("the second payment") in respect of which the employer is required to make a return under regulation 67B, unless the second payment is a payment to which this regulation or regulation 67BB or 67C applies, or

(b) the end of the period of seven days starting with the day following the day on which the payment is made.

 

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By Simon Alderson
13th Mar 2014 16:17

'Wife's wages'

HMRC's guidance about employees under 16 says they don't need to be included until they reach the tax threshold since there's no NI due anyway. Once they reach 16 they need to be included regardless of what they earn. So if you have 10 paperboys/girls and 5 are under 16 and 5 over, then only the 5 aged 16 and over have to go in.

As for spouse's wages, I'd agree with John Snowden. Those days are effectively gone and that's what partnerships and limited companies are for (depending on the profits involved).

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