HMRC’s Jane Brothwood* explains to employers what they need to do to prepare.
What is Real Time Information?
From April 2013 there will be a new way to report PAYE in real time, Real Time Information (RTI).
Under the present PAYE system, employers tell HMRC what deductions they have made from employees’ pay at the end of the year.
Reporting PAYE in real time will ensure that employees’ tax records are accurate, so they won’t face big PAYE overpayments or underpayments at the end of every tax year.
It will also provide accurate records on wages and tax for the forthcoming Universal Credit, so eligible employees will get the right amount of benefits or tax credits every month.
Instead of sending all PAYE details to HMRC in one go, at the end of the year, from April 2013 employers will have to:
- send details every time a payment is made
- use payroll software to send the details electronically
- send the details as part of your normal payroll process.
Most employers will begin reporting PAYE in real time in April 2013, with all doing so by October 2013.
For further information about RTI go to: www.hmrc.gov.uk/rti
* Jane Brothwood is HMRC’s head of RTI Communications
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