Real Time Information (RTI) is a priority Government programme aimed at improving the operation of Pay As You Earn (PAYE). It will operate online.
At present, employers and pension providers send information about tax and national insurance contributions (NICs) to HM Revenue & Customs (HMRC) after the end of each tax year. This means that HMRC cannot correct mistakes until the employer sends this information.
Under RTI employers and pension providers will tell HMRC about tax, NICs and other deductions when or before the payments are made, enabling the correct deductions to be made from pay and ensuring more employees pay the correct amount of tax and NICs in the tax year.
HMRC states that RTI will:
- make the PAYE process simpler and less burdensome for employers, for example by removing the need for the end of year return (P35 and P14) and simplifying the employee starting and leaving processes;
- reduce costs for HMRC and enable it to deal with non-compliance more effectively;
- support the payment of Universal Credits;
- make PAYE more accurate for individuals, over time reducing the number of bills and repayments sent after the end of the tax year;
- reduce tax credits error and fraud.
Employers and pension providers will send all the information relating to payments made to all their employees including those paid below the National Insurance Lower Earnings Limit online.
To ensure that the RTI programme is thoroughly tested before its general implementation, HMRC is piloting it with volunteer software developers and employers for a year. This started in April 2012.
HMRC envisage that most employers and pension providers that have not joined the RTI system during 2012-2013 will do so in April 2013 and that RTI will be routinely operating no later than October 2013. HMRC will notify all employers and pension providers about their obligations in due course.
In the meantime, HMRC recommends that employers prepare for RTI by checking that all the information they hold is complete and correct.
Contact us for further details:
Phone: 020 7354 3914
Email
No comments yet.