Solutions for Dealing with Real Time Information (RTI)

As an employer you may find Payroll time consuming. It can be a headache keeping on top of the legislation and dealing with the risk of staff being absent through illness or holiday.

Next year introduces yet another potential headache for those running payroll with the introduction by HMRC of Real Time Information (RTI).

Here are some pointers for you to consider if you are not aware of the impact of RTI:

What is it?


RTI stands for Real Time Information (RTI) which is being introduced by HMRC with the aim of improving how the Pay as You Earn system works. PAYE information will be collected more regularly in fact each time employers run their payroll rather than the current system of submission at the end of the tax year.

Why is it being introduced?


RTI will enable HMRC to collect information about tax & other deductions each time employers run their payroll. Currently employers and pension providers send HMRC pay and tax information annually. This can make it difficult to keep our data up-to-date and may mean that individuals have overpaid or underpaid tax at the end of the tax year. Under PAYE RTI, employers and pension providers will send information when or before they pay their employees. The better quality, more up-to-date information will mean that, over time, more people will pay the correct tax.

RTI will also support the introduction of Universal Credit - the Government’s flagship welfare programme. Universal Credit will need up-to-date information about employment and pension income so that the Department for Work and Pensions (DWP) can adjust claimants’ welfare payments to reflect their circumstances.

When does it come into force?


It will be mandatory from October 2013 for all but exempt employers. If companies have not been part of the pilot, they will be ‘invited’ to join between April and October 2013.

What impact will it have on your business?


Instead of submitting tax data at the end of the tax year they will need to do this for each payroll process whether weekly, fortnightly or monthly and with a lot more data on employees. Clearly the key to making successful RTI submissions is ensuring that your data is clean, correct and valid and that you are running RTI compliant payroll and BACS software. By doing this sooner rather than later you will not only avoid the last minute rush, but will be secure in the knowledge that your organisation is well placed to process successful RTI submissions within the legislated timelines.

The data will need to be accurate as any errors will cause the full submission to fail. There will then be penalties for employers and the failed submission may also lead, where applicable, to delayed welfare benefits payments for their employees.

With the introduction of RTI, HMRC will have up-to-date PAYE information and will be instantly aware if employers do not make timely and accurate payment of their monthly PAYE. From HMRC perspective, this will be a good thing but, from the employers’ perspective, it will be a potential nightmare.

Are you ready for RTI?


If payroll is giving you a headache at the moment, it is likely to get worse as 2013 approaches.

RSM Tenon’s specialist team can offer a high quality payroll service for you to avoid you being consumed by running payroll.

For further information and a quote for our payroll service, please contact Gillian Niven on 07800 617147 or contact your nearest RSM Tenon office.