Everywhere I turn at the moment I see adverts telling me that PAYE is changing from 6th April. They are all over Linkedin and even seem to be popping up on Facebook now, wanting people to “Like” them.
From your point of view, does it make any difference to you? In a word, no.
All that is happening is that HMRC is moving from a situation where employers reported once a year, after 5th April, what had happened in that tax year. Now, it is moving to Real Time Information which means that employers have to report ever payment made to you at the time it is made into your bank account.
Simplify have been taking taking part in the pilot for the last few months, so we are confident that all our systems will work in conjunction with HMRC’s new system, and that our Contractors will see absolutely no disruption when the swap over happens.
The new Real Time system should actually be a benefit to you as it should mean that issues with Tax Codes, rebates etc can all be dealt with much quicker than previously by HMRC. If you leave a position and don’t receive a P45, or you misplace it before starting a new role, it can mean that you are on a non-cumulative tax code for the rest of that tax year. The theory is that now that HMRC don’t have to wait for the year to end, these problems can be sorted in the tax year meaning.
The system is being introduce to support the government with the introduction of the Universal Benefits Scheme in October. Knowing exactly how much an individual has earned so far that year, should make the processing of benefits easier, and help to prevent fraud.
So, don’t panic about PAYE changing; it won’t affect your take home pay in any way, should actual make changes to a tax code mid year run more smoothly, and as Simplify have already made the change in advance of when we were required to, we are confident our systems will cope when the change over becomes compulsory for all employers.