Real Time Information – what does it mean for employers?
RTI is coming soon; find out what it means for you as an employer and what ir might mean for your employees... yawn
The honest answer is everything. The introduction of RTI is the biggest change in payroll since PAYE was first introduced. Under RTI employers will be required to return personal and payroll information about each employee as they make a payment to them. This will allow HMRC to track employees’ individual tax and earnings information real time.
HMRC believe that this will improve the accuracy of tax taken and also provided much more meaningful information by which to assess benefit claimants. In simple terms, it will provide HMRC with a lot more information about your employees than they ever have before. It also means they will know exactly how much you as an employer owes on a month by month basis.
From a practical point of view there is still much to be done. Payroll software developers are busily working on the changes that will have to be made to allow the software to be able to pass this information via the Government Gateway. All employees paid via BACS will be given a unique reference that will be added to the BACS data. This will allow HMRC to cross-match the data. This is a massive change in practices and procedures for employers/payroll agents and there is still much we don’t really know.
HMRC are inviting employers to joint RTI from April of this year with compulsory RTI requirements coming in October. But be warned, HMRC have announced that employers may be required to join before that date.
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