RTI or Real Time Information is the new system being introduced by HMRC in April 2013 to improve the operation of Pay as you Earn (PAYE).
Starting this April employers and pension providers will be required to submit information to HMRC on deductions for PAYE, national insurance contributions (NICs) and student loans every time they pay their employees rather than at the end of the year. HMRC believes the introduction of RTI will help individuals pay the right amount of income tax and National Insurance Contributions (NIC) throughout the tax year.
How will RTI benefit my business?
On the plus side, it should make the PAYE process simpler and less of a burden for businesses by streamlining paperwork as well as simplify the employee new starter and leaving processes.
For the most part though RTI underlies the government’s new state benefits overhaul otherwise known as Universal Credits and enables more efficient collection of outstanding PAYE and NIC liabilities.
When will RTI happen?
The new scheme is being phased in from April 2013. HMRC will notify employers 4-6 weeks before they must begin using RTI. All employers will be using the RTI service by October 2013.
Check your payroll data is accurate for RTI
You will need to check in advance that your payroll data is accurate and in an appropriate format for RTI. The information that you submit will be matched against records held on HMRC’s databases, and any discrepancies could lead to inaccurate tax calculations or trigger a compliance check.
If your business is not ready for RTI and you would like some advice please contact us for a no obligation consultation.
Tel: 07792 080789