Busbys Chartered Accountants

Real Time Information Helpsheet

ALL employers will be affected by the biggest change to PAYE since it was introduced in 1944. The new RTI system is being introduced to automate the provision of payroll information to H M Revenue & Customs, and it is also a key component in preparing for the introduction of Universal Tax Credit.

Key points:

  • All information will have to be submitted electronically to HMRC.
  • Returns will need to be filed for every payment – so this means weekly returns for any employees paid weekly, as well as monthly returns for monthly paid employees.
  • Returns must be filed on or before the payment is made to an employee.
  • Returns will need to be filed even if no tax or national insurance is due. So payments to employees earning less than the lower earnings limit (£109 per week or £472 per month from 6 April 2013) will still need to be submitted to HMRC.
  • Information concerning hours worked will need to be provided – this will only need to be given in bands, namely less than 16 hours, 16 – 30 hours, and more than 30 hours per week.

When will you be affected?

All employers will need to be complying with RTI by 6 October 2013 at the latest, but most employers will start operating under RTI from 6 April 2013. Some employers have already moved onto RTI as part of the pilot schemes that are already in operation. HMRC are due to write to all employers to advise them of their start date, and we expect letters to go out over the next couple of months.

What do I need to do now?

Firstly, you may need to register as an employer if previously all of your employees have been paid at a level where no tax or national insurance has been due. If you need help with this, please let us know. We will generally recommend that new employers start their registration on 6 April 2013.

Secondly, you need to make sure that you will either:

  • have compliant software, or
  • are using a payroll bureau that will be compliant, or
  • consider using the HMRC software. This is already in operation, but can only cope with up to 9 employees.

Most of the software providers are either compliant already, or will be ready before 5 April 2013. HMRC will not endorse any particular products, but they do include a list of software providers on their website: http://www.hmrc.gov.uk/softwaredevelopers/paye/rti-software-forms.htm. We are pleased to confirm that our software is already compliant, so those employers who use us as their payroll bureau can be reassured that we are prepared for RTI. It is clear that RTI is going to be more onerous than the current system, so sadly this will mean an increase in fees. We will discuss these with you if applicable. If you use another payroll bureau, please ensure that they will be RTI compliant.

Finally, you should ensure that your payroll data is correct, and if applicable, ensure that the data held by your payroll bureau is also correct. Specifically you should ensure:

  1. That you have full names for all employees. Initials will not be sufficient, and names should be validated against an official document – e.g. a passport or a driving licence. Abbreviations or nicknames should be corrected to full proper names.
  2. That you have correct dates of birth for all employees.
  3. That you have national insurance numbers for all employees. If you do not, HMRC are offering a National Insurance Number Verification Service once you are within RTI.

In addition you should also have correct address details, and if an employee has moved since 5 April 2012, you should ask them to notify HMRC of their new address.

If you have any queries regarding the above, please contact us on 01580 765088.
David Meredith • Carolyn Gore • Debbie Nelson-Gracie