Payroll: The Introduction of Real Time Information

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As you may already be aware Her Majesty’s Revenue & Customs (HMRC) are introducing a new system called Real Time Information (RTI) for businesses to report their payroll data. Their aim is that all employers will be under the RTI regime by October 2013 to coincide with the introduction, from that date, of the ‘Universal Credit’ benefit by the Department of Work & Pensions.

Currently the PAYE and National Insurance contributions deducted from salaries are paid over on a monthly basis and are accounted for annually by submitting a return for all employees paid during the tax year detailing the earnings, PAYE, NI etc. attributable to them on an individual basis.

Under RTI, payment of PAYE and NI on a monthly basis will continue as now but, in addition, a monthly return of information in respect of each employee paid in that month will have to be   submitted on or before the day they are paid. This return will contain the data previously submitted annually but will also have to include some additional data not previously required by the HMRC.

Once in place HMRC expect that RTI will make the PAYE process simpler and less burdensome for employers and HMRC. This will facilitate more frequent updating of tax codes which will reduce underpayments and overpayments. RTI will also be used in the calculation of the new ‘Universal Credit’ system of benefits, the aim of which is to streamline the many benefits currently being paid into one single payment.

Next Steps

We have already started to prepare for the introduction of RTI and will be contacting you with regard your payroll’s participation in the RTI scheme. To ensure that all our client’s payrolls are transitioned seamlessly, we will be checking the data that we currently hold for you, and will contact you for any additional information needed in order to meet HMRC requirements.

In the meantime, should you have any questions please do not hesitate to contact our payroll specialist team.

16 May 2012

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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 2012 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.