Real Time Information: Getting your business ready for the changes to Pay As You Earn in 2013
From April, HM Revenue and Customs (HMRC) is introducing a new way of reporting PAYE: Real Time Information, or RTI.
The structure of PAYE will not be changed, but RTI will change the way in which employers and pension providers send in PAYE details to HMRC.
Under RTI, information about PAYE payments will need to be sent in each time a payment is made as part of the payroll process, rather than at the end of the year as they are now. Every time you pay your employees/pensioners you will send your RTI return to HMRC online.
Regular reporting under RTI will reduce your end-of-year pressures and be more efficient, saving your organisation time and money.
Most employers will be legally required to use RTI from April 2013, and all employers will be routinely reporting PAYE in real time from October 2013.
HMRC will let you know when your business will need to make this move.
Here are some actions that you can take now:
If you use an agent, payroll bureau or commercial software provider, please contact them about getting your business ready for RTI, if you haven’t already done so.
• To get your payroll data right:
° Read HMRC’s improving your payroll data internet pages carefully and make sure the following payroll details for your employees are (i) fully up-to-date and (ii) in the right format for RTI purposes.
° Name must be the full and official forename(s) and surname (no initials) in the correct order.
° Date of birth must include the day, month and year.
° National Insurance number (NINO) must be given as two letters, followed by six digits and end with a letter which will be either A, B, C or D.
HMRC will work in partnership with employers to improve data quality and let you know about any discrepancies they find as you come into RTI, to give you a chance to put these right.
• To get your software right:
° If you use payroll software, it will need updating to use RTI. If you use a payroll software provider, please contact them about this.
° Some commercial payroll software providers provide free products for employers with 9 or fewer employees. HMRC’s Basic PAYE tools, which will work with RTI, is also available for employers with 9 or fewer employees free of charge.
To keep yourself up to date and to find out more please go to:
HMRC’s: RTI internet page
HMRC’s: Improving your payroll data
HMRC’s: Real Time Information: payroll and online forms