LAST September I highlighted an issue that will affect almost every employer in the UK from this April. The issue is RTI.

RTI stands for Real Time Information and it represents the biggest change to the PAYE system in decades.

Currently employers are required to maintain payroll records but only have to make a single electronic return of their payroll data to HMRC each year.

Under RTI, employers will have to make an electronic return to HMRC every time they run the payroll.

One effect of this will be that HMRC will, for the first time, know how much PAYE an employer owes each month.

It is safe to assume that HMRC will pursue outstanding PAYE quickly and decisively.

They will also levy penalties for late payment. Employers who routinely pay their PAYE late are in for a shock.

As long as the employer – or their payroll agent – pays the PAYE on time and uses software that is RTI compliant, you might think that there would be little to worry about.

Sadly, you would be wrong.

The law will require an RTI transmission (and therefore a payroll run) on or before the time a payment is made to an employee.

This will be relaxed in some very limited circumstances to require a transmission within seven days of the payment.

If you are a pub landlord, or you own a restaurant or shop or any business where you employ casuals as well as regular staff you will be caught by the ‘on or before/within seven days’ rule.

If you currently operate the payroll monthly but pay people more frequently that will have to change - 12 payroll runs could become 52.

And it gets worse. If you give an employee an advance, that is treated as a payment of wages which will have to be reported under the ‘on or before/within seven days’ rule as well. Once again you could find yourself running the payroll 52 times instead of 12.

The ‘on or before’ rule will impose a significant new burden on many small businesses. It is being imposed to facilitate the new Universal Credit state benefit, but is not expected to raise one penny of extra tax.

RTI will radically change the way employers operate their payrolls and with April only weeks away there is very little time left in which to prepare.

*Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823-624450.