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RTI Real Time Information

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From the Government website … Real Time Information (RTI) will improve the operation of the PAYE system by creating more up-to-date taxpayer records and making the system easier for employers and HMRC to administer.

Why we are changing PAYE

When PAYE was introduced almost 70 years ago, most people held just one job for most of their life and employers sent us pay and tax information annually. Today, employers still send us information annually, but many people change jobs more frequently, or have multiple employments or pensions, making it more difficult for us to keep our data up-to-date.

We also need up-to-date information about employment and pension income so the Department for Work and Pensions can adjust claimants’ Universal Credits awards, which will start from 2013 for some people.

Under RTI, employers and pension providers will send us information each time they pay their employees; we will be able to keep more accurate records and, over time, more people will pay the correct tax.

How it will affect businesses

RTI will reduce administrative burdens on business by about £300 million a year from 2014 to 2015. Employers will no longer need to send a separate end-of-year return.

We have consulted extensively among our customers to ensure that as far as possible, RTI is designed around how they operate. We have also been working with employers and pension providers in an RTI pilot to get the best learning and ensure the process is as user friendly as possible.

Our perspective…

What is this?

A new payroll system that HMRC is introducing

Who does it affect?

Anyone who operates payroll, even director-managed companies

Why is it happening?

The introduction of Universal Credits later this year needs up to date information about pay

When is it happening?

April 2013

What has changed?

Payroll data has to be submitted to HMRC in real time. This means that P45s etc are no longer required. It does mean that timescales are more rigid

Anything else?

Staff earning below the Lower Earnings Limit now have to reported on, which is new.

What should I do?

Make sure your software is compliant. Or make sure your accountant is up to date. Also, make sure all your data is up to date.

Are there any new penalties?

Starting from 2014 there will be penalties for late submission of payroll data

The post RTI Real Time Information appeared first on Dial Management Accounting.


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