PAYE Real Time Information – Micro Employers

The vast majority of employers are finding reporting in real time straight forward, but HMRC do recognise that a small proportion of micro employers (nine or fewer employees) and their agents still require more time to adapt.

Therefore, HMRC has agreed that existing micro employers (or their agent) who require more time will now have up to two years to adapt their processes to ensure they are ready to report all payments in real time before April 2016.

All employers will be required to report their PAYE each time they pay their employees by April 2016 (exemption rules may apply for example, in some limited circumstances employers have a week to report payments to casual workers).  Micro businesses will be encouraged by HMRC to adapt their processes sooner to ensure they are ready to report all their employees payments, in reaql time by April 2016.

This new relaxation is only applicable to existing employers of nine or fewer employees.  All employers starting to operate PAYE after 4 April 2014, as well as existing employers with 10 or more employees, will need to report ech time they pay therir employees from April 2014.

New employers are being encouraged by HMRC to start off on the right foot and are helping them to avoid the need to change their reporting process at a later date.

This package was developed with employers, agents, payroll software providers, representative bodies and the Department of Work and Pension, to help micro employers as the move towards full reporting of PAYE in real time,

The package also includes:-

  • Improved guidance, including best practise scenarios
  • Ongoing work with the software industry to harness technology to develop new ways to report PAYE information on or before the date they pay their employees

HMRC has been working closely with the Department of Work and Pensions in developing this package to ensure that it balances teh needs of Universal Credit claimants and micro employers.  Real time PAYE information is vital to ensure that all employees claiming Universal Credit receive what they are entitled to.  Therefore, it is important that micro employers make best use of this time given, so that they are reporting on or before they pay their employees by April 2016 or before Universal Credit is fully rolled out.