REAL TIME INFORMATION AND PAYE

RTI is a new way of reporting PAYE information. It will enable employers to tell HMRC about payments to employees as they are made rather than at the end of the tax year. Over time, this will allow HMRC to collect the right amount of tax and NICs from more individuals in the actual year. RTI will also support universal credits.

What is the timetable for introducing RTI?

Most employers will join RTI from April 2013, with all employers reporting RTI by October 2013. RTI reporting will be included within normal payroll activity.

What is changing?

Employers will no longer have to:

  • send an end of year return (P35, P14s and P38As) to HMRC
  • send a form P45 to HMRC when an employee leaves
  • send a form P46 to HMRC when an employee joins. 

What is staying the same?

  • the way tax and NICs are calculated
  • the need to give employees P60s
  • the dates of payments to HMRC of PAYE income tax and NICs
  • if required, the need to report expenses and benefits on a form P11D and pay class 1A NICs using form P11D(b)
  • the need to provide leavers with a P45
  • the need to obtain starter information. 

How will RTI benefit employers?

RTI is intended to remove admin burdens from employers, mainly by removing the end of year return process. Embedded processes will also mean better data quality resulting in more accurate tax and NICs payments and fewer queries from employees

Improving data quality: what needs to be done and when?

Data quality is key to the successful introduction of RTI. Employers should check the accuracy of their employee data. This involves making sure that surname, forename, gender, address, date of birth and National Insurance number (NINO) are correct and in the right format for RTI purposes. Employers should also make sure that they add staff to their payrolls who will now need to be included with their RTI submissions, for example, those under the lower earnings limit (LEL).

As always, please call us if you have any questions.