“The biggest change to PAYE reporting since 1944”
If you’re an employer you may have received a letter from HMRC about RTI.
Currently employers calculate pay and deductions for Income Tax and NIC monthly. They make payments of IT and NIC deducted on a monthly or quarterly basis to HMRC. Then at year end – 5 April, employers send in forms to HMRC telling HMRC who they’ve paid what to. HMRC agree the forms to payments made. All done.
From April 2013 to October 2013, this process will change. HMRC will require information from employers every time they make a payment to an employee. This is an important change.
Software providers are updating their software.
Employers should speak with their software providers to check the updates will be out in time.
Employers will need to check they have correct data about all their employees which needs to go on the RTI submissions.
Don’t get caught out – speak to your payroll provider soon.
As an employee you should notice over the coming year that your tax codes will be more accurate, and going forward the RTI info will be used to calculate entitlement to the new universal credits being proposed.