Pay As You Earn (PAYE) is the system that HM Revenue & Customs uses to collect Income Tax and National Insurance contributions from employees’ pay as they earn it. In the UK, the PAYE system has been in place since 1942.
The biggest change to the PAYE system – Real Time Information (RTI) came into effect on 6th April 2013. This new system requires employers to report PAYE information to HMRC in real time rather than once a year at the end of the tax year. In other words, every time a payroll is run (weekly or monthly), a report must be submitted to HMRC.
It is now critical for employers to ensure that all employee details are accurate and up to date.
• employee address
• date of birth
• national insurance number
Employers can cope with these changes in the following ways
• using HMRC’s basic PAYE tool
• using RTI compliant software
• outsourcing to a reliable payroll bureau
Want us to take care of it for you?
At Embarc, our payroll service is RTI compliant and we are already reporting in real time. If you would like us to assist, then please get in touch.