Are you ready for RTI?
Articles By This Author
- Are you contracting with the public sector? You ne...
- To be a Company or to be a Sole Trader: that is th...
- The Impact of Flat Rate VAT changes on small busin...
- SELF-ASSESSMENT TAX RETURN 2015/16
- 5 Things never to ignore with your business bank a...
- Minimum wage increase – How will it affect your ...
- Self Assessment – Why do we Pay On Account?
- The Importance of Hiring a Great Accountant
- VAT – will your business benefit from the Flat R...
- What Are My Options for Start-Up Investment?
What is RTI?
Real Time Information, or RTI, is a new system that's being introduced by HMRC to improve the operation of Pay as You Earn (PAYE). PAYE information will be collected more regularly and more efficiently when employers submit their regular payroll submissions.
How will it affect me?
Inevitably as HMRC streamline their operations the burden of reporting will fall on the employer. Instead of sending information once a year at Payroll Year End, you'll need to submit information electronically to HMRC for PAYE, NIC and student loans etc. every time you pay your employees.
When will it happen?
Businesses will receive a letter from HMRC in January or February 2013 informing them of their start date. For most this date will be April 2013 with everyone switching over by October 2013 in time for the introduction of the governments new Universal Credit.
What are my options?
If you run your own payroll system, you need to get RTI-enabled software in order to send your PAYE information to HMRC online every time a payment is made. You can do this in three ways:
- Using commercial payroll software, upgrading your existing software if necessary (your provider can advise on this).
- Using a payroll service provider, such as an accountant or a payroll bureau, who will do it for you.
- Using one of the free payroll software packages or HMRC’s free Basic PAYE Tools, available to those with nine or fewer employees.
What do I need to do?
Don’t leave the preparation until the last minute. There are actions you need to take and probably additional information you need to obtain from your employees.
- Make sure all your employee information (name, date of birth, gender, address and valid National Insurance number) is accurate and up to date.
- Register for PAYE Online, if you have not done so already.
- From April 2013, you will need to include new information in your payroll records, such as hours worked. You will need to complete employee information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit.
- You should look at how operating PAYE in real time may affect your business more widely. For instance, you may need to change some of your procedures for starters and leavers.
Before you ‘go live’ HMRC will perform a Payroll Alignment process by asking you to supply an extract of your payroll data in order that they can update their records to match yours. You will then be ready for your first real time submission.
How we can help….
We are RTI ready; our payroll department can guide you through the requirements ensuring a smooth transition to the new system. If you need assistance setting up, advice on the technicalities or would like us to run your payroll for you, please contact us on 01395 516658.