Time to get real on Real Time

    The requirement for employers to report PAYE information to HMRC in real time — known as Real Time Information (RTI) — comes into force on 6 April.

    The new rules will affect farmers, landlowners and shoots that employ casual labour; they will need to upgrade their systems in order to be able to send details electronically to HMRC every time they pay an employee, using payroll software as part of their routine payroll process.

    Employers will be legally required to submit electronic returns of payroll data to HMRC on either the next return that the employer is required to file or seven days following the date of payment, whichever is the sooner. Each return must state the number of contracted hours worked by the employee.

    Even employing one person for one day will be subject to this new online filing requirement: all casual labour will need to be included on the payroll, and all existing rules regarding casual labour will be superseded. There is no exemption for smaller employers and the new rules apply across the board. The onus is on the employer to know the full (official) names of employees, their dates of birth and their National Insurance numbers, and there will be penalties for non-compliance.

    A major feature of the new rules is the banning of cash-in-hand payments, which will particularly affect employers of students, harvest workers or other seasonal part-time staff, such as beaters.

    It is essential that by April all employers have the systems in place to manage the new rules to ensure they can continue business as normal. For their own protection, employers will have to insist on compliance from workers as a condition of employment; we expect HMRC to impose heavy penalties for anyone not conforming with the new legislation.

     
     

    Key contacts

    Simon Peck

    Simon Peck

    Director
    Professional Services

    Savills Salisbury

    +44 (0) 1722 426 854

    +44 (0) 1722 426 854