HMRC are urging employers to prepare themselves for the major PAYE changes that will come into effect in April this year. In three months time employers will be required to send PAYE returns electronically, using Real Time Information (or RTI) -enabled payroll software, to HM Revenue and Customs (HMRC) each time they pay their employees as part of routine payroll processes. This new process replaces a separate return at the end of each year and will include details of all employees’ pay, tax and deductions.

HMRC have advised employers to follow the following three steps to be ready for the changes;

  1. Visit HMRC website at for comprehensive information about RTI, including how to prepare, payroll software options and hints and tips to help avoid some common pitfalls.
  2. Acquire new or updated payroll software – employers will need to talk to their payroll software provider or their payroll service-provider (if they have one) about this.
  3. Start checking and updating employee information. It’s vital that the information employers have about their employees is accurate and up to date.

HMRC’s Director General of Personal Tax, Ruth Owen warned employers they must act as soon as possible in order to avoid a last minute rush. She advises employers on how to prepare for the new system; “Employers will need to send their first return – called a ‘Full Payment Submission’ or ‘FPS’ for salary or wage payments made to employees on or after 6 April – and if they have 250 or more employees they will have to send an Employer Alignment Submission before the first FPS. Although reporting PAYE in real time will be straightforward for most, some preparation is needed. There is more to it than simply buying or updating software – although this is key.

Employers may need to add employees such as casuals or those below the Lower Earnings Limit to their payroll system and must think about their payroll practices to make sure that they work for real-time reporting.”