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Better get your PAYE ducks in a row now while you still can

If you’ve been living under a rock, you may not have heard the ‘good news:’ there are major PAYE changes going into effect from April of next year, so you’d better get your ducks in a row now while there’s still time to prepare for the new procedures.

Her Majesty’s Revenue & Customs has made the decision to go ahead and change the way employers make deductions from the cash they pay their employees. While right now you just have to tell HMRC how much you’ve deducted at the end of the financial year, it won’t be long before you’ll be required to report deductions in real time – as if bookkeeping wasn’t enough of a pain.

HMRC says that the new Real Time Information PAYE system will ensure the accuracy of tax records, reducing the chance of underpayments or overpayments at the end of every tax year. For employers, this just means that there’s even more red tape that needs to be managed every pay period instead of just when it comes to tax time, making use of specialised payroll software so employers can electronically send the data to HMRC.

The taxman says that instituting RTI will save £300 million in administrative costs, at least on their end. Of course, some of these costs – in the form of time spent with frustrating new systems before finally giving up and getting an accountant to take care of it for you – will now have to be borne by employers instead, so you’d better get ready now while you’ve still got nine months to prepare.

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