Real Time Information

What is RTI?

‘RTI (Real Time Information) represents the biggest change for payroll since the introduction of Pay as You Earn (PAYE) in 1944. It affects any business operating a PAYE system for its employees and/or directors’.

RTI is a move away from notifying HMRC about the payments an employer has made through a yearend return, to regular online submissions as each pay period is paid. It is essentially replacing the stressful year-end P35 submission in April/May with a submission on or before you pay your employees for a period (whether daily, weekly, fortnightly, 4 weekly monthly, quarterly, half-yearly or annually).

Why RTI?­

RTI is designed to make the PAYE process simpler for everyone, as well as it being faster and more accurate, it should reduce the number of coding notice errors and allow HMRC to chase late payments more effectively. RTI is also being introduced in parallel with the Governments flagship policy, the new single welfare payment Universal Credit. The plan is to have both fully operational from October 2013. The drive is that people who are looking for work, who are casual workers, or on a low income will receive a monthly payment that reflects their present employment circumstances.

No Need to Panic

‘Don’t panic, it’s easier than you think. RTI should make PAYE more efficient and accurate’.

There is no change to the way tax and national insurance are calculated, or to the way deductions are made. There is no need to change payment dates or payroll calculations. The only thing that’s changing is how and when information is sent to HMRC.  Qtac Payroll Products can help you be RTI compliant with every payroll run. It is easy to use and makes RTI and PAYE simple.

Real Time Information -The Main Changes for Payroll? 

  • RTI will become part of the payroll process. Whenever a payroll run is carried out, RTI data on the payments will need to be submitted before or when employees are paid. This includes information about starters, leavers, who has been paid, what was deducted and how much they were paid.
  • RTI will simplify end of year payroll paperwork as it eliminates the need for annual payroll returns, since employers will supply HMRC with up to date information each time a payroll is run. The obligation to produce a P60 for employees will remain.
  • Less paperwork when employees leave or join. RTI will submit details of employees who have started or left, so P45 & P46 forms will no longer need to be submitted to HMRC. However employers will still have to pass on a P45 to leavers.
  • PAYE data will need to be “aligned” with HMRC. RTI will ensure the HMRC database matches the employee information held by employers
  • PAYE payments to HMRC will need to balance to the actual amounts deducted.  HMRC will expect monthly/quarterly payments to agree to the amounts reported via FPS submissions.  Any adjustments in regard to statutory payment recoveries, CIS and/or NICs payment holiday will need to be reported via an EPS submission. (Employer Payment Summary)
  • Where you offer a payroll bureau service, you will need to ensure that your clients provide you with the new data item fields for all new starters.  You should also relay the importance of accurate data.