RTI is a new way of reporting PAYE information. It will enable employers and pension providers to tell HMRC about payments to employees/pensioners 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-year. RTI will also support universal credits.
Most employers and pension providers will join RTI from April 2013, with all employers and pension providers reporting RTI by October 2013.
RTI reporting will be embedded into normal payroll activity. A wide range of payroll software is available, including some free products. HMRC’s free software, Basic PAYE Tools, is also available for employers with nine or fewer employees. More information about the range of payroll software is available or speak to your payroll provider.
Employers and pension providers will no longer have to:
RTI will remove admin burdens of £300m a year from employers/pension providers, 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 or pensioners.
RTI will be introduced progressively to allow time for testing the new processes. We began piloting RTI in April with 10 volunteer employers. A further 300 employers/pension providers will join the pilot in May and June and up to 1300 employers/pension providers will be reporting RTI by the end of September. What’s more, by March 2013 we aim to have brought in up to 250,000 employers/pension providers.
Data quality is key to the successful introduction of RTI. Employers and pension providers should check the accuracy of their employee/pensioner 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).
Tax professionals can assist their clients by:
HMRC is committed to a transition to RTI that is smooth and on time. We will continue to work closely with all involved in the operation of PAYE to achieve this. For further information about RTI, please visit the HMRC Operating PAYE in real time (RTI) webpage.
Jane Brothwood – head of RTI communications, HMRC