RTI

The HMRC message follows below.

Pay As You Earn

Getting your clients ready for changes to Pay As You Earn

Real Time Information

From April 2013 HM Revenue & Customs is introducing a new way of reporting PAYE: Real Time Information – or RTI. RTI will bring PAYE into the 21st century. It will make PAYE easier for employers, pension providers and HMRC to administer and over time, more accurate for individuals. Real Time Information is also essential for the smooth introduction of Universal Credit by the Department for Work and Pensions.

Most employers will be legally required to send PAYE information in real time from April 2013, with all employers submitting PAYE information this way by October 2013.

What do you need to think about now to make sure you and your clients are ready?

Data Quality – The quality of the employee information that we hold and process is crucial to the successful introduction of submitting PAYE information in real time. Mismatched information accounts for over 80% of data quality issues we have, so we recommend you start to prepare by checking the details you and your clients hold for employees, in particular:

·        National Insurance number

·        full names

·        date of birth

For more information on Data Quality see http://www.hmrc.gov.uk/rti/dip/index.htm

Payroll Alignment – This is an important process that ALL employers and pension providers will need to undergo. Alignment will ensure that HMRC, you and your clients all hold a consistent view of the employees in every PAYE scheme before you start to send us PAYE information in real time. To do this, you will have to provide details of all employees who have been on the payroll since the start of the current tax year – even if they have not been paid in the relevant period or have now left the payroll.

It is therefore vital that your own and your clients’ records are up to date. There is more information about payroll alignment at http://www.hmrc.gov.uk/softwaredevelopers/rti/payroll-alignment.pdf

Payroll software – If you use payroll software, it will need to be updated so that it can submit PAYE information in real time. If you use a payroll software provider, please contact them. If you need help picking a payroll software package that is capable of submitting PAYE information in real time, please go to http://www.hmrc.gov.uk/softwaredevelopers/paye/rti-software-forms.htm HMRC’s Basic PAYE Tools product is also available free of charge to employers with 9 or fewer employees.