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Tax Tip

Are you aware of RTI? Jan 2012

What is RTI?

It stands for Real Time Information, and is a priority Government programme aimed at improving the operation of Pay As You Earn (PAYE). It will make the system better for individuals and easier for employers and HM Revenue & Customs (HMRC) to operate and it also supports the introduction of Universal Credits.

Currently, employers and pension providers send information about tax, National Insurance contributions (NICs) and other payroll deductions to HMRC after the end of each tax year. The result is that HMRC cannot correct mistakes until the employer sends this information.

Instead of an annual submission, all employers will have to submit the payroll data online on every occasion the payroll is run. This will allow the Taxman to understand who is being paid what amounts, and what PAYE is due, on a real-time basis. The details of employees' pay will be passed to the Department for Work & Pensions, to allow the amount of Universal Credits (which are replacing Tax Credits from October 2013) paid to workers to be adjusted on a monthly basis.

RTI will be COMPULSORY for all employers and pension providers by October 2013.
But to start with the information has to be accurate. So, the Taxman is asking all employers to spring-clean their payroll data in preparation for the launch. So,

 accurate date of birth,
 full official name (not just initials or nick-name)
 Correct National Insurance number, for each and every employee.

If the data for one of your employees does not agree to that on the Tax Office computer, the submission of the payroll data under RTI may fail, and you may get fined.

Oliver Reeve of the Payroll Department of ABDS says:

“It will take some time to check the details of every employee on a payroll, large or small, so it would be best to start this task as soon as possible.”

If you need any help and advice for your business on Payroll, national Insurance or an Outsourced Accountancy Service, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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