Real Time Information (RTI) for PAYE

Real Time information will improve the operation of the PAYE system by creating more up-to-date taxpayer records and making the system easier for employers and HMRC to administer.

Why are HMRC changing PAYE

When PAYE was introduced almost 70 years ago, most people held just one job for most of their life and employers sent HMRC pay and tax information annually, but many people change jobs more frequently, or have multiple employments or pensions, making it more difficult for HMRC to keep their data up-to-date.

HMRC also need up-to-date information about employment and pension income so the Department for Work and Pensions can adjust claimants’ Universal Credits awards, which will start from 2013 for some people.

Under RTI, employers and pension providers will send HMRC information each time they pay their employees; HMRC will then be able to keep more accurate records and, over time, more people will pay the correct tax.

How will it affect business
RTI will reduce administrative burdens on business by about £300 million a year from 2014 to 2015. Employers will nolonger need to send a separate end of year return.

What doers it mean for employees
Employees must ensure that up-to-date information is given to their payroll administrator- this is full name, date of birth and National Insurance number.Any changes to hours worked, new starters, leavers, temporary and lower paid staff, holiday and sick pay must be reported.

When is it submitted
RTI is submitted electronically via the Government Gateway before the employees are paid or before the end of that pay frequency (whichever is earliest).

From April 2015 penalties will be issued by HMRC for late filing of RTI.