The Real Time Information System (RTI) for PAYE
24 Jan 2013
This revolutionary development in the PAYE system will involve many fundamental changes. If you do your own payroll you need to be up to speed with what RTI is all about.
For every occasion that an employee is paid(Weekly, fortnightly, 4 weekly or monthly) the details must be reported to HMRC. The idea is that it will make it much easier to ensure the right amount of tax and national insurance is paid at the right time. This in turn will reduce the need for end-of-tax-year reconciliations.
RTI should give cost savings to employers in due course, but there will be initial costs of switching to the new scheme. Payrolls for domestic staff will no longer be able to use a simplified scheme, meaning extra complications. Moreover, an employee paid less than the lower earnings level (so no NIC payable) must have their earnings reported, unlike under the current system.
Savings in completing forms will arise, as no annual form P35 or P14s will be needed, but forms P60 and P11D will still be with us.
Most employers will choose to change over in April 13. Now is the time to address the issue by reference to your systems and proceedures and to make sure your software is compliant.
If all of this sounds like too much work, please contact us for a competitive quote for providing a fully compliant payroll service.