The way you report PAYE (Pay As You Earn) to HM Revenue & Customs (HMRC) changed from 6 April 2013. If you used a Simplified Deduction Scheme on paper before 6 April 2013 and you employ someone to provide care and support you must tell HMRC if you want to continue filing paper returns.
If you use the Simplified Deduction Scheme but have always sent your returns online, or use the scheme for other domestic help, you cannot continue to use it when you pay someone after 6 April 2013.
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If you currently file your returns on paper and operate the 'Simplified Deduction Scheme' you can tell HMRC that you want to continue to report on paper. This only applies if you employ someone to provide care or support services at or from your home and have completed the 'Care and Support employers: Employer declaration', form RTI 15, you will have been sent by HMRC.
You can complete the RTI 15 if:
You can continue to file on paper annually until April 2014 when the Simplified scheme will close to everyone. You will then start sending PAYE information in real time but can continue to use paper to file.
HMRC will send you your new tax year information ready for April by letter. You do not need to take more action now to prepare for PAYE in real time unless you change your mind and decide to start from April 2013, or at any time during the tax year, instead of waiting until April 2014.
If you decided not to, or aren't entitled to, complete RTI 15 then you will not be able to use the paper or online Simplified PAYE scheme after 6 April 2013 and must take the actions laid out in the section of this guide called 'What to do if you can’t continue to use the Simplified scheme'.
At the end of the tax year 2012-13, you must still complete your end of year tasks - either online or on paper - and then be ready to start reporting PAYE in real time for paydays after 6 April 2013.
To get ready you need to:
There's a checklist to help you, and more detail about the other actions you need to take by following the links below.
HMRC recognises that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC has therefore agreed a relaxation of reporting arrangements for small businesses.
If you think you will benefit from the relaxation of the reporting rules for small employers see HMRC's guidance on the relaxation of reporting for small businesses.
If this relaxation doesn't apply to you, to report PAYE in real time you (or your accountant, bookkeeper or payroll bureau) will have to:
You will keep the same Employer PAYE reference but HMRC will stop sending you a P12 card for each employee and a P37 the end of the year. Instead you should have received form P6(T) before the start of the new tax year and you must use this tax code with your payroll software or HMRC's Basic PAYE Tools.
Reporting in real time allows HMRC to work out how much you should be paying over each month. This will help you to pay the right amount and keep your PAYE account on track and up-to-date. You can find more information about operating PAYE in real time by following the link below.
Your payroll software will do most of the reporting automatically but you must make sure your first report has accurate employee data as HMRC will be using that report to match your employee details with the records they hold on your employees.
At the end of the 2012-13 tax year, whether you are moving into PAYE in real time or not, you'll need to complete an Employer Annual Return, form P37. This provides a summary of the information on the P12 deduction cards you've completed for the tax year and must be filed by 19 May 2013.
You can submit form P37 to HMRC either online or on paper, but HMRC strongly recommends that you file online rather than on paper as it's quicker, more convenient and more reliable.
By the end of the tax year, if you have registered to file online and you filed your P37 online for the previous year, HMRC will have sent you a P37N electronic notification to remind you to file your P37 online. If you file your returns on paper, HMRC will have sent you a paper form P37 to complete. In order to file any PAYE forms online you must first register for HMRC's 'PAYE Online for employers' service. For more information, follow the link below.
If you used commercial payroll software or HMRC's PAYE Online service to complete forms P12, then the figures you need to transfer to form P37 are worked out for you automatically - this is especially useful if you have more than one employee. You'll then be able to file both your P37 and your P12s online to reach HMRC by 19 May.
You can also print out a form P60 that will be prepared automatically for you by the software or online service that you use - you won't need to complete a paper form P60. You must give your employee their P60 by 31 May after the end of the tax year.
In this case you must add up the figures from your P12s yourself in order to complete form P37. You then sign the declaration and certificate on the P37 and send it together with the completed P12s so it reaches HMRC by 19 May after the year end. If you file your forms on paper, HMRC will send your employee a P60.
Bear in mind that even if you've used paper P12s during the year, you can still file your Employer Annual Return online - just transfer the figures from the paper P12 to electronic versions of forms P12 and P37.
You can view details of payments you have made in 2012-13 and amounts that you owe, using:
If you employ a carer in your home you may be treated as their employer. This means you must register as an employer and you may have to deduct Income Tax, National Insurance contributions (NICs) and possibly student loan deductions from the money you pay them. You may also have to pay employer's NICs.
First you must register as an employer with HMRC by calling the HMRC New Employer Helpline. They will ask you if you want to use paper or an electronic software system to keep your pay records and send information to HMRC. To use paper you must qualify for a concession. To check you are eligible to use a paper payroll and reporting system before you telephone HMRC, read 'Guidance for employers exempt from filing online'.