(PRWEB UK) 27 December 2012
As part of the move towards the Universal Credit system, HMRC is introducing RTI in April 2013 as a new way of reporting pay and deductions made under PAYE. RTI does not affect the way employees are paid, but each time employers run their payroll they will be required to collect pay-related information and submit this electronically to HMRC. Most payroll software solutions will be compliant with these requirements. However, those who use Bacs to pay employees, either using Direct Bacs software or using Bacs Bureau Services, will need to ensure that the payment software solution used is also RTI compliant. Since 92% of employees are paid in this way, this will affect the majority of employers. Payment software will need to generate a new hash code to link the payment file to the payroll RTI file. This code will be used by HMRC to match payment files with RTI files as part of their compliance process, and it is therefore important to ensure that this code is included.
The process will work like this:
1. Employer’s payroll software will automatically generate the hash – the hash consists of a randomly generated 4 digit code; the originating sort code; the destination sort code and the payment value.
2. The hash will be submitted along with the RTI file as part of the Full Payment Submission (FPS) – every time a payroll is run.
3. The 4 digit code in 1 above will be included in the payment file which is submitted via Bacs.
4. On receipt of the payment file Bacs will recreate the hash and pass to HMRC.
5. HMRC then match the hash submitted from the payroll to the hash submitted from the payment file sent via Bacs.
To ensure their Bacs payroll is completely RTI compliant, employers must ensure that the software being used has the capability to recreate the hash and pass it on to HMRC. If the Bacs software is not compliant in this way then HMRC will be unable to match the payment file with the payroll file meaning the payroll will be non-compliant.
There are many software solutions available which will meet the requirements of RTI. Eagle Consulting is a leading Bacs Bureau and uses Albany Software’s Albacs solution which is fully compliant in every respect with RTI. Albany has been involved with the Pilot Scheme under RTI and has had significant input into the scheme.
Established in 1993 Eagle Consulting now employs nearly 50 staff including several qualified accountants trained in the Big 4 accountancy practices. Based entirely in the UK they offer a complete Accounting Service delivering a flexible and cost-effective solution to meet the day to day needs of growing businesses. Eagle Consulting deploy a range of accounting, payroll and payment solutions that provide the ability to manage cashflow and record and control revenue and expenditure. Their expert team can provide weekly and monthly Financial Information and KPIs and can support clients with personal and corporate Tax Planning whilst ensuring all statutory requirements are met. Eagle Consulting’s client portfolio currently comprises over 700 companies nationwide and includes businesses from a wide range of sectors.
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