Payroll. Fun-times right? Well the government has decided to simplify the process of paying the staff on your books with something of a payroll revolution. You should by now be familiar with the term RTI – Real Time Information – the new way for processing and receiving information in keeping with the way of the digital age. The new system means that employers will be required to submit information about employee payments and deductions either before or when payments are made.
The words payroll and revolution may seem like the strangest of bedfellows but it’s true, as this is the biggest shake up to the way that staff in the UK are paid since the end of World War Two, and the changes address the main areas of importance when it comes to the robust management of staff on its books.
Efficiency – fast and simple
It’s the eternal buzzword for the smooth running of most businesses, but its RTI’s raison d’être. And just to ensure that the transition is as smooth as possible, providers specialising in payroll software have been working with HMRC to test the new system out- Sage is one example, and you can also find a comprehensive of other free providers here.
The current system and its ridiculous plethora of codes have been a solid recipe for confusion: a delicious example of which saw over a million people being sent tax demands collectively worth over 3 million in the tax year 2010/2011. Lovely. Having more frequent updates which demand the highest level of accuracy from staff ( with the new system, errors as simple as entering in one name incorrectly will mean having to re-submit the pay information for your entire company) means saving future time and pennies by avoiding costly mistakes, potential repayments or financial errors. Hence, cost efficiency is also central to this reform, as the changes are estimated to lead to businesses in the UK collectively saving around 300 million in administration costs. Regular updates also mean that the dreaded end of year payroll submissions cease as the work is broken down over the course of the year.
Digital Switchover- silver lined cloud (system)
Part of the digital revolution has always been centralising storage and portals of information- whether its Dropbox or smartphones- data has never been more accessible than it is now ( plus, there has probably never been as much data to hand as there is today),and its increasingly becoming the norm to store as much information in one central location for ease of access. Cue the cloud, the 21st century’s method of communication, storage and networking. The question to ask of your business is how connected are we? Have we made the switchover?
If not, then now is your chance ( to be fair, you don’t actually have a choice)- all of the information to do with payroll will have to submitted electronically. This also means that the days of all those p 40 something forms are numbered, huzzah! Which also means that the new system is greener, double huzzah! And this will knock your socks off: the new system is also more secure, CRACK OPEN A BOTTLE!
Database Management – easy and accurate
Keeping track of your company information, and more importantly the staff on your books is vital. The new RTI system means that it is easier to surf the changing tides of your team – whether monitoring and logging information about staff turn-over or changes to staff wages, cloud systems are the most apt at keeping track of changes both for you and HMRC. This makes it easier for the HMRC to respond to developments quickly.
It will also be easier to verify data too, as the new RTI system has mechanisms in place for checking NI Numbers. Vast quantities of data are thus made easier to manage, but also effectively ensure that the data you have is more genuine: being able to verify information means safeguarding against fraud and non-compliance issues too.
The new system is also here to support the introduction of Universal Credit, which despite its contentions, is in some part about simplifying the way we handle information about our finances. From an administrative perspective, it will now be easier to connect the dots between earnings and allowances without as much confusion.
About the Author:Tej from London is a blogger who lives her life by Jane Austen chick lit, she swears it the gospel truth. She blogs for Sage who you can follow on Twitter @sageuk.