The new tax year on 6th April brings a significant change to the way HMRC need to be supplied with payroll information. Employers will have to provide HMRC their PAYE information in real time. You may see this referred to as Real Time Information – or RTI. This means that employers (or their accountant, bookkeeper or payroll bureau) will have to send details to HMRC every time they pay an employee, at the time they pay them. They will be required use payroll software to send this information electronically as part of their routine payroll process.
Most employers will be legally required to use RTI from April 2013, and all employers will be routinely reporting PAYE in real time from October 2013. If HMRC has not contacted you already they will be letting you know when your business will need to make this move.
The HMRC web site has information about what you need to do to meet your obligations, here is the link to their ‘Getting started guide.’
Ensuring that your PAYE records are accurate matters. Here are some key actions that you can take now:
If you use a commercial software provider, agent, or payroll bureau , please contact them about getting your business ready for RTI, if you haven’t already done so.
Your payroll data needs to be corrects, read HMRC’s ‘improving your payroll data’ internet pages carefully and make sure the following payroll details for your employees are (i) fully up-to-date and (ii) in the right format for RTI purposes.
Name must be the full and official forename(s) and surname (no initials) in the correct order.
Date of birth must include the day, month and year.
National Insurance number (NINO) must be given as two letters, followed by six digits and end with a letter which will be either A, B, C or D.
HMRC will work in partnership with employers to improve data quality and let you know about any discrepancies they find as you come into RTI, to give you a chance to put these right.
If you use payroll software, it will need updating to use RTI. If you use a payroll software provider, please contact them about this.
Some commercial payroll software providers provide free products for employers with 9 or fewer employees. HMRC’s Basic PAYE tools, which will work with RTI, is also available for employers with 9 or fewer employees free of charge.
HMRC Employer Helpline – 08457 143 143