14 million P2 Coding Notices and RTI

As HMRC continues to progress their PAYE computer system with the National Insurance and PAYE Service (NPS), they are expecting to issue 14 million P2 Coding Notices to employers in tax year 2011-12 as Pay and Benefits magazine recently reported.

The problems associated with incorrect tax codes were well highlighted in the national press during 2010, due to the introduction of this new system. These problems have been attributed to a mismatch of information between employers HR and payroll software systems, pension providers and HMRC. The system had to be updated to make sure PAYE will work well in time for the introduction of Real Time Information (RTI).

In readiness for the tax year 2011-12 and in light of previous problems, HMRC issued largely electronically P9s. For those unable to receive P9s electronically in time for the new tax year, HMRC advised they follow the P9X procedure, the main crux of which was to add 100 to any tax code ending in L to reflect a change in allowance. Perhaps ironically, those who couldn’t receive this electronically, thus perhaps the least technology savvy of their audience, were told the full details of how to follow P9X procedure were available on the HMRC website.

Pressure to modernise to leaner greener paperless electronic systems leads organisations such as HMRC to increasingly direct people and organisations to more electronic means. The large HMRC website for procedural information can make it difficult for payroll managers to keep up to speed with all the latest updates and impossible to those who still use paper based systems and manual approaches to payroll. HR software, payroll software, also other payroll solutions such as time and attendance software can all help with compliance through digital updates. However there will still be companies who can’t afford that level of investment, but need that level of processing power. For those, payroll bureau services, or fully managed payroll outsourcing could be the best solution to keeping HR payroll activities up to date.

To find out more about Safe EMS HR and payroll software and bureau or managed services visit www.safe-ems.co.uk and click on ‘enquire online’, or call us on 0844 583 2134 quoting ref ‘HMRC RTI’ to arrange a free demonstration.


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