Are you Ready for Automated Tax Deductions
Are you prepared to invest more hours into managing your payroll? It looks like you are going have to in order to meet the upcoming changes in tax and payroll calculations.
Over the next 18 months, HR and Payroll managers will need to provide more detail to HMRC, which would usually be sent at the end of the tax year. Information such as employee’s date of birth, address and national insurance number, normal working hours, passport details, purpose of parental leave etc. will now be require in order for employees to be moved to Real Time Information (RTI). These changes are being made to improve the operations of PAYE tax systems and ensure that recipients of the new Universal Credit receive the right amount of benefits every month.
Up until March 2013 this program will be a voluntary act with the goal of mobbing 250,000 employers to this new model. Unfortunately you can’t dodge this bullet for long – by April, it will be compulsory that all employers provide the necessary details required to move to RTI.
Payroll systems are mostly managed in a ‘semi-manual’ way where manual checks and input are relied on by a person and not the computer program. This will not be reliable under the new RTI scheme and so it will be imperative that payroll records are error-free.
The fact of the matter is that payroll is already a difficult task to manage. Several hours are already being invested in by payroll, HR, business owners, and other personnel to ensure that employees are being paid correctly and that the organisations are deducting the correct amount of tax.