Pay and Benefits

Last month we asked whether your company had begun to carry out a data cleanse. A staggering 45 per cent have not done so, while a further 47 per cent plan to do so in the future.

 

Real-Time Information (RTI) is being utilised to bring the Pay As You Earn system into the 21st century. By October 2013 all employers will be expected to submit this data to HM Revenue & Customs (HMRC) every time they pay someone. RTI will consist of a number of items including tax, National Insurance and other deduction details. The purpose is to ensure that everyone pays the right amount of tax and it will remove the need for end-of-year reporting as this will be done on a rolling basis.

The quality of the information submitted to HMRC will be integral to the success of RTI. If the data supplied is incorrect, then the records relating to that employee will not be matched. Therefore, ensuring that employers have up-to-date records is critical. This is especially true considering that HMRC will be linked with the Department for Work and Pensions. The Government’s new benefits system, Universal Credit, will use pay information to accurately calculate the amount of tax credits that an individual is entitled to.

 

HMRC has set up a range of support networks to help employers to get their data right. It will also target employees in order to make clear the importance of giving their employer accurate information, especially as any discrepancies could impact on the tax they pay and the pension/benefits they can claim.

 

To find out more about the progress of RTI and data cleansing click here.