HMRC is now introducing a new form of payroll reporting for businesses called Real Time Information, or RTI for short. Beginning in April 2013, employers will be required to report payroll in RTI methods, which means that information about all payroll must be submitted to HMRC at the time a payment is made online as part of the payroll process, as opposed to doing it all at the end of the year.
Employers will need to update or acquire the proper software with which they can use payroll updating in RTI come April 2013, so they can be ready to report payroll information every payday. Some packages are free, and many software packages can simply be updated versions of older software packages with more functionality.
The RTI system is designed and being implemented in order to create a payroll system appropriate for the 21st century. It will make operating payroll much easier for employers and pension providers, and make the system significantly easier for the HMRC to administer. Additionally, the payroll information reporting will soon support the operation of Universal Credit when the Department of Work and Pensions introduces their own system several months after RTI.
In April 2012, HMRC worked with a small group of pilot businesses to ensure that RTI would work for the masses. The program was a success, as a small number of businesses learned how to report payroll every payday and use the new RTI system for success within their industries. Rest assured that because of this, the RTI system will be implemented seamlessly within your business and industry.
HMRC has provided a great deal of links and websites for operating the new PAYE RTI system, including how to operate the system in real time, and more. You can ask a host of questions, and be taken through a step by step process on how to operate the RTI system properly and follow the laws and regulations of HMRC while still succeeding in business and adequately paying and crediting your employees.
RTI is a great opportunity for the HMRC and all the country’s businesses to use payroll in the 21st century, and partner on making payroll reporting and taxation much easier and more efficient. Instead of waiting until the end of the year and becoming concerned with complicated and lengthy payroll reporting schemes, RTI allows for employers to track payroll and deductions every payday, and then move on to the next week.
Not only will this make life easier for HMRC, this will allow businesses and business owners to worry less come tax day and be able to focus much more on their daily business operations without the complications of tax returns. For more information on RTI and the changes within HMRC, click here.