The new requirement from HM Revenue and Customs (HMRC) to provide monthly Real-Time Information (RTI), for anyone who is paid through the Pay As You Earn system, has placed a greater administration burden on freelance contractors who are paid in this way.
According to PayMatters, the tax, payroll and umbrella company service, many still do not realise the importance of providing deductions and payments made on a weekly or monthly basis or face the risk the possibility of being fined by HMRC.
For freelance contractors, who use an umbrella company, the concern about meeting the requirements is removed and is dealt with by organisations like PayMatters.
Jon Biddle, PayMatters Director of Payroll and Compliance Services, says: “The PAYE system has barely changed since 1944, so businesses need to adapt to the new reality HRMC is proposing. The introduction of RTI has changes the way payroll works. As payments are made the information needs to be submitted to HMRC and not after the end of the tax year as many contractors are used to. By doing this on a more regular basis should also be more accurate so making the year-end easier to finalise.
“Using the umbrella service can take away the concerns of missing deadlines while removing a layer of administration for our customers.”
Established in 2008, PayMatters has a team of more than 60 providing accountancy services to freelance contractors working either through its umbrella company or their own limited company.
PayMatters is APSCo accredited, professional passport approved and are business partners with the Institute of Recruiters (IOR). It prides itself as being fully HMRC compliant from an employers and employees NI, PAYE and expense perspective.