Real Time Information (RTI)
HM Revenue and Customs (HMRC) is introducing a new way of reporting PAYE: Real Time Information, or RTI.
This basically means that payroll information will need to be entered into a software package and submitted the HMRC either over the internet using the Govenment Gateway or EDI on or before the payment to the employee.
At present PAYE is calculated by the employer throughout the year but the final figures are submitted to HMRC at the year end.
This will apply to some employers from April 2013 but to all employers by October 2013, HMRC will let the employer know when they need to start with RTI.
HMRC will provide a basic PAYE software package free for employers with nine employees or less to allow transmission of RTI to HMRC.
The basic PAYE tools will be used offline and the employer will only need to connect to the internet to submit the RTI file.
Employers already using a software provider or outsourcing their payroll will need to speak to the provider to make sure they will be ready when necessary.
HMRC will use the first RTI submission of data called a ‘Full Payment Submission’ (FPS) to align the data they hold on each employee with that held by the employer for small companies.
Large companies with more than 250 employees will need to submit an ‘Employer Alignment Submission’ (EAS) before their first FPS.
The employer must make sure that the data held for each employee/ pensioner is accurate and up to date. The following are a few helpful tips:
- All staff should be included even those under the lower earnings threshold for example
- An accurate date of birth in eight digit format
- Employees full names should be used, no initials and in the correct order i.e. forename then surname
- National insurance number, two letters followed by six numbers and a letter, if not able to get the NINO from the employee or unsure of its accuracy there is a tracing service available www.hmrc.uk/forms/ca6855.pdf
- Information held should be checked to an official source such as HMRC, Birth certificate or Passport.
For joiners and leavers the P45 / P46 procedures will still be used for the time being but will not need to be submitted the HMRC.
HMRC will continue to send notifications of PAYE coding notices and NINO’s to the employer.
HMRC are currently running a pilot scheme from April 2012 to launch in April 2013 so ther may be further developments to come.
Hope you find this useful as it will aplly to all employers.