HMRC is introducing a new way of reporting PAYE (Pay As You Earn) – called Real Time Information, or RTI.
Table Of Contents
From April 2013 employers and pension providers will report their payroll information to HM Revenue & Customs (HMRC) in a new way.
They will send HMRC information about any payments and deductions they make to employees or pension recipients each time they are made, as part of the payroll process. Payroll software will simply collect the information and send it to HMRC online. This will replace the requirement to complete an annual return of PAYE tax and national insurance contributions. The vast majority of employers will be making PAYE returns in real time from April 2013, and it will be mandatory for all employers to report in real time from October 2013.
- More frequent updating of accurate tax codes.
- Less underpayments and over-payments.
- Reduce tax credit errors and frauds.
- Get payroll software if you don’t already have any.
- Update your existing payroll software to a version with RTI functionality.
- Use a payroll provider such as an accountant or payroll bureau to do the reporting for you.
What needs to be reported with RTI
- Full Payment Submission (FPS) to tell HMRC each time you are due to pay an employee.
- Employer Payment Summary (EPS) if you don’t have any employees to pay during that period.
These reports will include:
- The amount you pay employees.
- Deductions such as income tax and national insurance contributions.
- Starter and leaver dates if applicable.
- Include details of all employees paid including those who earn below the NIC’s lower earnings limit (LEL).