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Every employer needs to prepare for PAYE changes in New Year

It doesn’t matter how large – or how small – your firm may be when it comes to the new Real Time Information system being implemented into PAYE next year.

The new system, which will go into effect from April of this year, is the first major change made to the national insurance and PAYE system since 1944, when the system was originally introduced. The changes are being made to improve PAYE accuracy, says Her Majesty’s Revenue & Customs, as the taxman will receive earnings information every time an employer pays one of their workers no matter the frequency of pay period.

He new changes are not all good news, industry experts say, as while accuracy will improve under the new system, there are a whole host of issues that must be dealt with by employers before the new RTI system goes into effect. The system requires specialised payroll software that is compatible with HMRC’s systems, as PAYE and NI payment information will be sent electronically over the internet every time an employer makes a payment, and payrolls need to be aligned in order to match the payroll records of employers with the information held by HMRC.

Any firm, especially small firms, that currently do not make use of payroll software should begin doing so immediately, industry experts recommend, as there are a scant four months before RTI goes live. Ensure that your payroll software will be RTI compliant, these experts add.

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