Real Time Information (RTI) update

                                                                                        

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What is RTI?

RTI is REAL TIME INFORMATION.  This is the new system being introduced by HMRC for employers and pension providers to report their payroll information. 

As supporting information will be submitted to HMRC every time a payment is made, RTI will replace the need to complete an annual return of PAYE and National Insurance contributions.  RTI will, however, require the delivery of more information and place a greater burden on the monthly process. The way that PAYE is calculated will not change, but the way information is reported will.

Why is it changing?

  • To bring PAYE into the 21st century. 
  • To support the DWP (Department for Work and Pensions) who are introducing Universal Credits in October 2013 to replace the current benefit system.
  • To ensure people receive the correct benefits.
  • To resolve PAYE errors more efficiently.
  • To help reduce benefit fraud.

When is it happening?

  • RTI is already underway with HMRC using a small group of employers to pilot the scheme.  This started in April 2012 and will continue into 2013.
  • The pilot scheme will ensure that HMRC’s IT systems are functioning correctly    and will test third party software ahead of the bulk intake in April 2013.
  • RTI will be mandatory for companies with more than 5,000 employees from April 2013 and will become mandatory for all from October 2013.

So what is Throgmorton doing?

Preparing for RTI and what happens next?

  • Throgmorton as a company have volunteered and will be joining the pilot scheme in December 2012.  This will enable us to test our software and processes and ensure that all is in order before we transition  our client base.
  • Our software – SAGE, has recently been upgraded in-line with RTI specification.
  • Our Payroll Specialists will shortly be contacting each of their clients to double check that the information we hold in respect of their employees is accurate and to gather any other data that has previously not been required.  If the RTI submission contains missing or mismatched data, this could result in an incorrect tax calculation or a HMRC compliance check.
  • There are potentially 108 pieces of personal data that may be needed for reporting purposes and the information input into RTI must be accurate.  Missing or mismatched data In the RTI submission could result in incorrect tax calculations or a HMRC compliance check.
  • The following list is a sample of the detailed instructions included in HMRC’s guidance:

 

RTI

  • Once it has been decided which date a client will join RTI, Throgmorton will complete an EAS (Employer Alignment Submission) for that client.  This will enable HMRC to run checks on the data and report error messages or tax code changes dependant on the data submitted.  Once this has been completed the client’s payroll will be in RTI and ready for the first FPS (Full Payment Submission).
  • RTI doesn’t just affect Payroll.  It can impact other areas of the business including HR, Tax, IT, Legal and Finance/Treasury. Where needed, we will work with the relevant areas to ensure a smooth transition.  Potential impact detailed below:

What is required from our clients?

  • Ensure that all information for new starters is submitted on time and is accurate and accompanied by the relevant documentation.
  • Make Throgmorton aware of any changes to personal or company details.
  • Communicate with employees about the importance of notifying any changes to their personal data and the impact delays.

RTI

Additional Information

What are EAS, FPS, EPS and NVR?
They are the various types of submissions that will be required for RTI. 

RTI Submissions – The Big Four

RTI

  • RTI will change the way Payroll Year End works.  
  • Employers will still be required to provide employees with:

    -Form P60;
    -Forms P11D and P11d(a) for taxable benefits and expenses. 

  • Tasks that will NO longer need to be completed are:

    -Submissions of P14’s, P35;
    -P38A returns for casual employees.


Cheryl Baker
18 December 2012

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To download a pdf version of this publication please click HERE 

About Throgmorton: Throgmorton is one of the leading companies specialising in the provision of financial and administrative outsourcing to the UK SME financial services sector.

The information in this notice is intended for general guidance only. Throgmorton does not accept any responsibility for losses incurred to any person acting or refraining to act as a result of the information in this notice. Advice should be taken in the context of specific circumstances.

Copyright 2013 Throgmorton UK Limited. All rights reserved. Throgmorton is a trading name of Throgmorton UK Limited a company registered in England and Wales (company no 3853848) having its registered office at 4th Floor, Reading Bridge House, George Street, Reading, Berkshire, RG1 8LS.