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changes to the PAYE system - Real Time Information

By Kevin Russell | 19 March 2012 | Comments (3)

HMRC

Payroll procedures are changing! From April next year, employers and pension providers will need to provide ‘Real Time Information’ online, to HMRC. Submissions will provide HMRC with tax, national insurance and other payroll deductions for each employee, together with changes to the payroll (starters, leavers), every time the payroll is run.

Additional information will also be required to support the new Universal Credits system such as the number of hours a person is expected to, or regularly works in a week.

HMRC have prepared some employer FAQ’s which can be viewed here.

Did you know? Stewardship run an excellent Payroll Bureau service which is significantly more comprehensive than most commercial bureaus and tailored specifically to Christian charities and churches. For details click here

Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 

comments:

Richard Ward

March 23, 2012 9:27 PM
Thanks for the link to the FAQ at HMRC. There it is stated:
The first FPS should also include the hours normally worked, that is, the number of hours a person is expected or regularly works in a week.
This is problematic. Ministers do not usually have stated hours. If ours is typical he is willing to provide spiritual assistance at any time, day or night. He tries to have Mondays off.

Kevin Russell

April 4, 2012 2:06 PM
Hi Richard.

You have raised a very good, and important question. As you may be aware, the purpose behind the requirement to submit hours 'normally' worked is in order to assess entitlement to benefits and in particular, the new universal credit.

I have therefore taken your question up with the HMRC team responsible for the implementation of RTI and will post their response here, when I have it.

Kevin Russell

April 5, 2012 11:31 AM
Here is the HMRC response:

Where hours are not fixed employers will need to enter an estimate of ?normal? hours worked. Hours are in bands, so a precise figure is not required, but obviously for someone who happens to normally work hours that are close to the benefit threshholds of 16 or 30 hours per week, the employer will need to put a bit of thought into deciding which side of the line they fit.

I recognise that this is diificult as the employer will not necessarily know what their employee's benefit position is. I have indicated to HMRC that further questions may arise!

HMRC say that the hours worked should be based on the number of hours a person expects to normally work in a week. The word 'normally' should be given its ordinary everyday meaning of regularly, usually, typically.

So far as the RTI reporting is concerned, you will not be asked to enter a specific number of hours but according to bands, such as: Up to 15.99 hours / 16 - 29.99 hours / 30 hours or more / Other.

If an employee is on paid leave - for example annual leave or sick leave - you should report the normal hours worked. If you consider a, b or c are not appropriate then enter d 'other'.

I would be interested in any other informed questions that readers may have, on the introduction of Real Time Information, which I will take up with HMRC as appropriate.

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