Real Time Information, Retained Reserves and Resolutions
Real Time Information (RTI)
HMRC introduced RTI payroll reporting on 6 April 2013. All companies were originally required to report their payroll numbers on-line to HMRC on or before paying their employees. Fortunately this requirement has been relaxed and now only monthly on-line reporting of payroll data is required. See our blog for more information on what is required and see our blog on the easement issued by HMRC just as RTI reporting became a requirement.
You may not be required to pay the PAYE you have deducted from your employees each month. If your payroll tax averages less than £1500 you can still pay the tax to HMRC each quarter. See letter Q.
Retained reserves
This is an accounting term and it applies to companies only. It refers to the profits your company has made that have been left in the company. The company can pay dividends up to this amount; providing it has the cash or other assets to pay the dividend.
You can see the balance on the retained reserves on your balance sheet in the capital and reserves section. When your accountant prepares your full accounts he will include a note in the accounts to detail the movement on the reserves. Usually this note will include:
Reserves brought forward from last year
Profit in the current year
Less: dividends paid to shareholders in the current year
Reserves carried forward to next year.
Resolutions
Resolutions apply to companies only and a resolution is an agreement or decision made by the directors or shareholders. When a resolution is passed the company is bound by it. There are number of actions that need to be passed as resolutions either by the directors or the shareholders in order to be valid under Company law. The most common resolutions companies pass are dividend resolutions. See our blog with helpful hints on the paperwork you should complete to pay a valid dividend.
Other resolutions are required to change the company’s name, issue new shares, cancel old shares or appoint new directors. Some of the resolutions are required to be filed at Companies House within 15 days of being passed for example resolutions changing the company name or share capital.