Employers must familiarise themselves with their responsibilities and kick-start their preparations for the Revenue’s PAYE Modernisation programme, urges Rachel Mapleston, Legislation Expert at leading HR and payroll provider MHR.
In less than a years’ time all employers will have to conform to the new Pay as You Earn (PAYE) process, which will see returns processed in real time. The new programme will provide the Revenue, employers and employees with up to date and accurate payroll information.
Rachel says: “In short, the annual process for submitting PAYE data will change to real-time, meaning submissions relating to employee’s pay and deductions will be submitted to the Revenue each time an employee is paid, with a deadline of on or before pay day. The requirement to manually log on to the Revenue’s Online Services (ROS) to make submissions and download PAYE data should become obsolete, as it will be integrated into your payroll software”.
Alongside key stakeholders, HM Revenue and Customs (HMRC) and HR and Payroll software suppliers from the UK have been included in the consultation process to ensure lessons learnt from their transition to Real Time Information (RTI) are taken into account. This means that businesses should benefit from a more sophisticated design with seamless integration and transition into existing processes.
In the pursuit of accurate up to date PAYE information, the Revenue has introduced a Payroll Notification (RPN) service, a replacement for the current P2C process. This service will not only be used to notify employers of PAYE data for existing employees, but also new employees that have not yet been paid. A response, with up to date PAYE arrangements, should be returned in time for an employee’s first payment.
Rachel adds: “The success of the RPN service will depend on the efficiency of the response service from the Revenue, particularly with weekly paid employees.
“As part of the imminent PAYE modernisation, P45, P46 and the P60 forms will also become obsolete. Accurate and timely payroll submissions will be crucial to this, as employees will rely on accessing this data via their online PAYE account (MyAccount). The annual maintenance, administration and distribution cost of P45, P46 and the P60 forms, makes this decision a favourable one, but there needs to be consideration for those that may not want to be ‘online’.
“In order to make the January 2019 go live date, employers need to start preparing now. Employees who do not have a current year P2C in place, also known as a Tax Credit Certificate, will need to be registered. They must also have a Personal Public Service Number (PPSN). This is a vital data item in the submission process. The quality and accuracy of data is paramount in a real time situation and can be the deciding factor for success.
“Payroll and HR software and service suppliers should already have started work to meet the January 2019 deadline. How they intend to integrate the new processes into their solution should be established, communicated, and in development, to ensure a fully integrated process that works seamlessly with ROS. Failure to do this will lead to risks and complications, with two disjointed systems that require manual processing to ensure compliance. “
The Revenue will launch its mandatory PAYE modernisation programme on 1 January 2019. Ahead of the launch, the Revenue has published guidance on how to prepare, including checks to ensure that employers have registered all employees with the Revenue.
MHR is a specialist provider of HR, talent management, payroll and analytics software and services, supporting over 1,000 companies across the UK and Ireland. Customers include: Queens University Belfast, Skanska, Tourism Ireland, Cafcass, Sytner, Signet Group, Nandos, Regatta, TKMaxx, Alliance Cornhill, Velux Co, Salvation Army, HSB Engineering and more.