HMRC have forecast that around 300,000 more UK taxpayers will have overpaid or underpaid tax, than in previous years before RTI was launched. HMRC have already made a u-turn on plans to implement fines for non-compliant employers due to being swamped with issues. The most common of which, is chasing employers for money that they do not owe.

The culprit in many cases will be the misreporting of statutory benefits which need to be deducted from the amount owed to HMRC, but which many employers are forgetting to include on their Employers Payment Summary. Some employers are also forgetting to claim their NIC Employment Allowance, which generously offers up to £2,000 off your Class 1 National Insurance during the current tax year.

From 6th October 2014, HMRC will be introducing rigorous penalties for employers who don’t file on time or who don’t pay across the PAYE due on time. Filing your monthly Full Payment Summary or Employer Payment Summary late could cost a business with 1 – 9 employees £100 per month!

Here’s our action plan guide to staying on top of your payroll:

  • Keep all of your payroll information up to date. Make sure you have a set process for collecting the information from new employees, including their address, National Insurance Number and Date of Birth. They will also need to provide a P45 or complete a P46 declaration to determine the tax code to be used. Also don’t forget to check their eligibility to work in the UK (see our earlier blog post ‘Are your employees legal?’)
  • Make sure you understand what you owe and how it has been calculated. Do not assume that HMRC have got it right if they have sent you a demand for money owed. Also, check monthly to make sure you have not underpaid or overpaid using the Employer’s Dashboard on the HMRC website.
  • Ensure all Employer Payment Summaries (EPS) and Full Payment Summaries (FPS) are filled out completely and sent before the salary payments are made every month.
  • Have a contingency plan and Payroll timetable for what needs to be done by whom and when.
  • Contact us! We can offer a complete payroll bureau service for very reasonable fees and take all of the stress off your hands.

If you would like to find out how we can help you rule your finances with an iron fist (or rather let us do it for you) please don’t hesitate to get in touch. We are happy to provide a free initial consultation to discuss your needs.

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