Real-time information and the overhaul of payroll taxation
In April of this year, we witnessed the biggest change to the PAYE system since 1944. The new system is designed to improve the efficiency by which HMRC collects PAYE and National Insurance contributions, through the use of real-time information or RTI. Although most employers ‘went live’ in April, RTI will be compulsory for all companies by October 2013.
Under the old regime, companies had until the end of their financial year before HMRC became aware of any arrears. This often left HMRC with large exposures as unsecured creditors of many businesses.
Therefore, the new regime was designed to give HMRC greater visibility of a company’s contributions and allow them to enforce their position immediately. This new approach by HMRC means that companies need to be more mindful than ever of falling foul of HMRC’s requirements as once they have taken steps to enforce it will need to be dealt with immediately…
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