HMRC Real Time Information

The Process around PAYE is changing

The HM Revenues and Customs (HMRC) are changing the way Pay As You Earn (PAYE) details are being submitted.

What’s changing?

Currently the PAYE return process is a manual procedure, occurring annually, that exposes the system to errors and inefficiency - employers only find out at year end if they have deducted the correct amount of tax during the year. By October 2013 employers will be required to automatically submit details about tax and other deductions to the HMRC each time they do payroll. The details will be sent via Bacs as part of the Bacs submission. This is called Real Time Information (RTI).

Benefits of RTI

Having transparency over financial status is a priority for the government and RTI will also facilitate consolidated and automated tax reconciliations for individuals and support the introduction of Universal Credit(a reform to the state benefit system). For employers RTI will:

Reduce administrative costs of PAYE through phasing out annual employer returns and by removing need to submit P45 or P46 forms.

Prevent identify fraud, errors and overpayments in the current benefits and tax credits system which will ensure that individuals are taxed correctly through PAYE

Increase efficiency around submission of PAYE information

Mouse over the sections above to find out more about what RTI means for you

QUESTIONS?

We welcome any questions you may have on HMRC RTI.

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Timetable for change

Stephen Banyard, Acting Director General for Personal Tax, said: “We will pilot the system from April 2012 and begin to move employers onto the new system in stages over the following 18 months. We expect all employers to be using the new system by 2013”.

Current timetable published by HMRC is as follows:

Mar 2011	– Technical specification to be issued
Oct 2011	– Test system available to solution providers
April 2012	– Pilot Customers submitting RTI (Complete by Oct 2012)
April 2013	– Large employers (250+) to start RTI
	– Medium employers (50 to 249) to start RTI
Aug 2013	– Small employers (<49) to start RTI
Oct 2013	– All employers submitting RTI

What do employers need to do now?

You don’t need to do anything right now. However you will need to be aware of this initiative, as by the end of 2012, as a submitter of payroll or pension payments, your software will need to be able to submit additional required RTI information along with your Bacs payments.

Bottomline have been actively involved in the consultation process with HMRC, and we will keep businesses fully informed of HMRC’s progress with this initiative and actions that need to be made by them and when.

If you would like further information about RTI and what the implications are for your business, you can request a call back from your account manageror alternatively contact us directly by calling 0118 9822320 or emailingemea-info@bottomline.com.