Pictured: Chris Dorricott
A Shropshire accountant has welcomed new rules that require
employers to re-think how and when they notify HM Revenue and
Customs about tax transactions.
Chris Dorricott, from Dyke Yaxley Chartered Accountants, in
Shrewsbury, said currently employers send details of payments and
statutory deductions for all their employees to HMRC at the end of
the tax year.
"But where some employees have more than one source of income,
this can lead to tax code errors, because it's not always picked up
that they are not paying the right amount of income tax.
"So when the employee information is eventually sent in, it can
be months if not years before the adjustments are made to correct
the code."
Chris said the current system had created the regular issue of
tax refunds to some and big tax bills to others in order to balance
the books.
"This is all to do with the National Insurance and PAYE system
(NPS) that was introduced in 2009.
"It is actually a very positive move that all these tax code
errors have been picked up by the new system as it means the
information HMRC hold is gradually becoming cleaner and more
accurate."
And now, to ensure people are paying the right tax at the right
time, HMRC has introduced its "real time information" scheme.
"The new rules will take effect in October 2013, and mean that
the information normally sent at the end of the financial year will
need to be sent to HMRC before or at the same time as a payment is
made to your employee.
"This is great news in the longer term, as the information will
be more up-to-date and so more accurate - this will also mean the
current Annual Employer Return process will end.
"So whether you pay weekly, fortnightly or monthly, all
information must be sent to HMRC every time you pay someone.
"Make sure your systems are ready and that your business is
prepared for the new rules - they will make a real difference to
you and to your staff."
For more information about Dyke Yaxley, please visit their
website here: www.dykeyaxley.co.uk