Pay and Benefits

Last month, we asked you whether you thought that Real-Time Information (RTI) would improve the Pay As You Earn system. The results highlight that opinions on RTI are evenly split.

 

The new RTI system will mean that employers will have to send HM Revenue & Customs (HMRC) more than 100 pieces of information about each employee every payday.

RTI has been in the pipeline for more than five years and is the direct result of HM Treasury needing to collect tax more effectively. Currently around £2 billion is underpaid each month by employers. Other drivers have been the need to clear up the data held by HMRC and the approaching implementation of Universal Credits. The new welfare benefits system will rely on RTI in order to ensure that people are receiving the correct entitlement, which in turn should reduce the level of fraud.

 

RTI will make tax payments more accurate and for payrollers it should mean that end-of-year processes will be dramatically reduced as reporting will happen on a payday-by-payday basis, not yearly. However, there are a number of concerns around both the implementation of the system and a number of different scenarios, as no two payrolls are the same.

 

The timescale for introducing RTI is tight. Universal Credits will be introduced from October 2013 and as a result RTI will need to be up and running by this time. First a pilot scheme will be run, then from April 2013, employers will be able to migrate over to RTI, with all employers having to submit RTI by October 2013.