Are You Ready for RTI?
The government have decided it’s time for a complete remake of the PAYE model which has until now remained mainly unchanged since its introduction in 1944.
The Governments view is that these changes must be made to improve PAYE in order to:
1. Support the Governments wider tax and welfare agenda;
2. Reduces costs borne by employers, individuals and HMRC;
3. Increase the number of Individual who are subject to correct deductions;
4. Finally to reduce fraud and error in the credits and benefits system.
This New system will be phased in from April 2013 and by October 2013 in will be mandatory for all employers.
Despite all its good intentions RTI will require educations that employers are expected to take.
The New model Named RTI(Real Time Information) takes away the stressful year end Process of P35’s and P14’s and will be replaced by reporting each time you pay your staff.
What does not change under RTI?
PAYE will stay the same with the use of Tax codes, deducting Tax and NI and calculating pay all works in the same way. It’s not what you are telling it’s how you are telling that is changing.
What does change under RTI?
When RTI begins you will have to send HMRC a FPS (Full Payment Submission) that shows the tax and NI and any other deductions on or before the payroll for the period is run.
Instead of a full year end submission you’ll just need to tell HMRC that you are running the final pay run for the year as you process it.
How you can prepare for RTI?
Name- always provide the individuals full and official full name and not just initials. Make sure these names are spelt correctly and in the right order also include the middle name of an individual if they have one.
Date of Birth- always provide the correct DOB do not enter a default date or make one up and make sure this is in the correct format as follows ‘DD/MM/YYYY’
National Insurance Number- Make sure this is correct.