Real time information

Real time information (RTI), the biggest shake up to payroll procedures since PAYE was introduced in the 1940’s, will become a reality for employers from April 2013.

Look out for a letter from HMRC inviting your PAYE scheme to join RTI, an invitation you cannot refuse! Let us know as soon as you have received your invitation so we can help you make the necessary transition.

The principle behind RTI is simple, HMRC want to know which employees are being paid, together with details of the deductions being made ‘on or before’ the payment is made to the employee.

Real time information key procedures

Here we primarily concentrate on the key submissions but do contact us regarding any questions concerning RTI.

Key submissions	What the submission contains and ‘top tips’
Employer alignment submission (EAS) – preparing for RTI	Although this submission is only compulsory for large employers or those with a complex payroll system. It is advisable for all employers. It provides HMRC with details of all employees employed in the current tax year.
Full payment submission (FPS)  – operating RTI	Used to report details of employees being paid for a particular pay period.
Employer payment submission (EPS) - operating RTI	Used to report employer details each month such as payments to HMRC (or where no payments are due) and also CIS suffered.

Changes to employees leaving and new employees

Under RTI information, when an employee leaves a company, the information is filed automatically along with the payment details for the pay period during which they left, as opposed to separately filing a P45. There will still be a P45 to issued to the employee.

For a new employee, information for them is automatically filed during the pay period in which they started work for an employer. This means that there will no longer be P46’s issued to employees, unless the employer is exempt from filing online.

If we are currently handling your payroll then you don’t have to worry about doing anything for RTI, our software provider has already confirmed that they can handle the change and are fully compliant with RTI.

If we do not currently handle your payroll and you would like further details of the service we provide, please give us a call and we can also quote a price to suit your needs.

Mark

Universal tax credit

Universal credit – an introduction 

Universal Credit is a new simpler, single monthly payment for people looking for work or on a low income. It will replace some of the benefits and tax credits you might be getting now. 

What is Universal credit?

Universal Credit is a new simpler, single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now.
Universal Credit will replace:

• Income-based Jobseeker's Allowance
• Income-related Employment and Support Allowance
• Income Support
• Child Tax Credit
• Working Tax Credit
• Housing Benefit 

If you're on a low income, you will probably still get Universal Credit when you first start a new job or increase your part-time hours.

Your Universal Credit won't suddenly be taken away, but steadily withdrawn as your earnings increase. This means that you will be better off for every additional hour you work.

All Universal Credit claimants will have a claimant commitment which clearly sets out your responsibilities and the consequences if you fail to meet them.  

What’s different about Universal credit?

Universal Credit will be paid in a different way to current benefits:

• it will be paid monthly into an account you choose
• if you and your partner are both eligible, you will get one monthly payment for the household
• if you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord yourself 

Universal Credit will generally be managed online. You can make your claim online, then check on your payments and updates through your online account. 

When does Universal credit start?

Universal Credit will be introduced in stages between October 2013 and 2017, although it will start for some people in selected areas from April 2013.

April 2013 - Universal Credit begins in selected areas of Oldham, Tameside, Warrington and Wigan.

October 2013 - The national introduction of Universal Credit begins as groups of newly unemployed will be able to make their claim. Claims for existing benefits and credits will be gradually phased out.

From spring 2014 - Universal Credit will expand to accept new claims from people who are in work as claims to tax credits are closed down. Current benefit claimants will be moved onto Universal Credit in a phased approach.

2017 - Universal Credit roll-out complete. 

Changes to other benefits in 2013

There will be some important changes to a number of other benefits in 2013.

• Disability Living Allowance will be replaced by Personal Independence Payment from 2013.
• Council Tax Benefit will be abolished in April 2013 and replaced by a system of localised support.
• Pension Credit will be amended from October 2014 to include help with eligible rent and dependent children.
• Social Fund is also being reformed to introduce new local assistance.
• A cap on the total amount of benefits that can be claimed will be introduced in April 2013.

If you are interested in how the Universal tax credit work and would like to know more, be sure to get in touch.

Mark