PAYE – REAL TIME INFORMATION (RTI)

Background

In order to implement the new Universal Credit (which is due to replace the numerous state benefits in October 2013) HMRC need to collect more information, more regularly, regarding people’s income. They are going to do this via the new RTI system which comes into effect from 6 April 2013.

RTI is a new system for reporting pay, tax, national insurance and other details to HMRC. Rather than collect these details at the end of the tax year HMRC will collect this information each time a payment is made to an employee. P11D’s and P60’s are still required.

Information required each time the payroll is run

For each employee:

1. Full name and address of the employee
2. Date of birth
3. National Insurance number
4. Gross pay, tax & NIC deducted
5. Hours worked by each individual employee
6. Gender

For each company:

1. District number
2. PAYE reference
3. PAYE Accounts Office Reference

Failure to provide this information will result in rejection of the RTI return.

General points

1. There will be no parallel run with the existing PAYE system.
2. Penalties will be raised automatically for the failure of employers to make their RTI returns on time. Indicative penalties for the failure to report on time are £100 for each instance of late reporting , but are yet to be confirmed.
3. There are a couple of useful website for employers if you wish to find out more:

   www.tolley.co.uk/rti (you can sign up for a newsletter)

   www.payerti.org

4. It appears that P45 ‘s will no longer be required but this has yet to be agreed.
5. Foreign workers – there is an increasing trend for PAYE audits to involve the Home Office, leading to raids by immigration officials on illegal overseas workers.
6. You will need to get into the habit , every time you take on a new employee, to say to them “I need the following information (date of birth, etc) about you, and I cannot start to pay you until you give me this information”.

J Aubin Ltd Action Plan

Before 5 April 2013 the following process will be done for all clients wishing J Aubin Ltd to continue to run their payrolls:

1. Issue new client Engagement Letters to cover the RTI process
2. Collection of necessary data on all employees
3. Ensuring payroll database is up to date
4. Establish a new payroll procedure so that a client reviews and “signs off” the submission before it can be made
5. Test submissions, if permitted by the software in time for the first reporting deadline.
6. 6 April 2013 – Go live

Moneysoft Payroll software used by J Aubin Ltd has already provided confirmation that they will be able to comply with the new requirements for the 2013-14 payroll year.

Further client newsletters will be issued as more information becomes available .

If you have any queries not answered by the websites mentioned above, please do not hesitate to contact me

Joy Aubin
November 2012