PAYE RTI News
PayeRti.org launches campaign to raise awareness of Real Time Information
October 5, 2012
PayeRti.org officially launched its website today, exactly 6 months before Pay As You Earn Real Time Information reporting starts for the majority of UK employers, in April 2013.
PAYE Real Time Information (PAYE RTI) is being launched by HMRC in the biggest change to Pay As You Earn since its introduction in 1944. By law, from April 2013, employers will be required to align their payroll processes with the payment of employees, so that HMRC are notified ‘in real time’ of gross pay, National Insurance and PAYE deductions at the same time payment is made.
The timetable for PAYE RTI has been dictated by the Government’s commitment to introduce Universal Credit in October 2013, which relies on PAYE RTI to provide timely and accurate details of claimants’ net earnings to the Department for Work and Pensions.
HMRC’s implementation of PAYE RTI relies on commercial software providers notifying employer PAYE RTI returns over the internet, via the Government Gateway. Although HMRC has consistently stated it can deliver the systems on time, there are widespread concerns that HMRC’s deployment of RTI will be challenging, with most small businesses still largely unaware of the changes.
HMRC has made clear that employers will be liable to automated penalty notices if HMRC does not receive an RTI return for each payroll period ‘on or before’ the date employees are paid. While HMRC’s has not yet announced the penalties that will apply, it has indicated penalties of £100 for each instance of late reporting. RTI compliant software is not scheduled for general release by payroll software providers until the completion of HMRC’s pilot in March 2013, providing little time for employers to become familiar with the new processes.
The ‘on or before’ rule presents a potential issue to accounting firms who will submit RTI returns on behalf of employers but will not have sight of the actual amounts paid to employees, as most small organisations make their own payments to staff. The alignment of the payroll process to actual payments is central to RTI.
The website launch comes exactly 6 months to the day most small and medium sized businesses are mandated into PAYE RTI at the beginning of the financial year on 6th April 2013. Larger employers will be free to negotiate the timing of their entry into RTI before October 2013.
David Heaton, the Chairman of the ICAEW Tax Faculty, who played a leading role in coordinating the PayeRti.org initiative, said: “PayeRti.org answers an urgent need to get the message about RTI out to UK businesses, which just hasn’t got through to date. With just 6 months to prepare it’s vital businesses get to grips with the issue now.”
PayeRti.org (www.payerti.org) is a collaboration of the UK accountancy profession’s principal professional associations and leading SME business groups, the Federation for Small Businesses and the British Chambers of Commerce.
PayeRti.org provides free, impartial and trusted information to UK business on HMRC’s introduction of PAYE Real Time Information, and draws attention to the role UK accounting firms play in providing payroll services to more than 55% of the working population who work in organisations of 49 or fewer employees.