HMRC has confirmed that it will go live with Real Time
Information (“RTI”) reporting for PAYE/NIC in April 2013. This is a significant change which
will require all employers to make a PAYE/NIC return for each
employee on or before the pay date.
So what should you be doing now, and how can you start to
prepare?
What is Real Time information (RTI)?
RTI is a new system for reporting pay, tax, National Insurance
and other details to HMRC. Rather than submit these details at the
end of the tax year through a P35/P14 return, HMRC will collect
this data every time a payment is made to the employee. Additional
information may also be required when the employer remits the tax
and NIC to HMRC. HMRC’s strategic solution was to receive the data
via the BACS system. The strategic solution has been put on hold
and HMRC have now developed an interim solution where data is sent
via the internet. P11D and P60 requirements will remain.
So far, HMRC has identified over 100 potential pieces of
information to be transmitted under the Real Time
Information programme and roughly 80% of these are directly
relevant to most employers. However, RTI is still under development
and the final list may be longer.
How is RTI being developed?
HMRC will be trialling RTI with approximately 300 volunteer
employers from April 2012. If the pilot is successful HMRC will
increase the number of employers in the RTI scheme using an early
adopter program. All employers will be expected to begin making RTI
submissions to HMRC from April 2013. IRIS are playing an
active role in this and we are looking for volunteers now to start
submitting from September 2012. 
Register your interest
What does this mean for my business?
RTI is a fundamental change to the way in which your
organisation reports pay and other details about your employees to
HMRC. Take a look at our
RTI infographic to see how it will change how you process
payroll. It impacts three key areas of your business:
Data
HMRC have identified a number of pieces of information about
employees that are critical to RTI. An employer will not be able to
make RTI submissions to HMRC without providing the employee’s
surname, forename, gender and date of birth. The address is
also mandatory for new starters but not
existing employees. NI number is desirable however not knowing
the NI number for some of your employees will not stop submission
to HMRC.
Systems
RTI will require employers to transmit details about the tax and
NI treatment of payments to HMRC each time a payment is made. This
means that the tax decisions made about payments (e.g. whether or
not all or part of any payment is to be made tax free, NIC free or
both) will be included in the RTI submission. Additional employee
data, (such as the number of hours they worked has been including
in the RTI file. This is important for DUP and tax credit payments)
will need to be acquired for inclusion into the payroll system.
Your payroll software will need to be capable of sending the
RTI submission direct to HMRC.
Compliance
Under RTI, HMRC will automatically be aware of the tax, NI and
student loan liability each month. The employer will have to make
an additional monthly submission if there is any adjustment to the
payment made to HMRC. Adjustments may be due for things like SMP
recovery and compensation.
Which IRIS products will be RTI compliant?
All of our payroll software will be fully RTI
compliant by April 2013. Our intention is to include RTI in Summer
2012 releases of each product. This version will not be issued to
all users. We intend to invite some employers to become early
adopters. IRIS P11D and Accounting packages are not affected.
Is IRIS participating in the RTI trial during 2012?
Yes. We have six employers included in the pilot starting
in May 2012. The trial product is scheduled for release just
after the normal April 2012 release.
When will we see changes to the main product releases?
The April 2012 release of EARNIE/IPP will include some changes
in anticipation of the RTI requirements. This will include a number
of new database fields and additional fields on some of the
existing screens. Although some new fields have been added, most of
the RTI requirements will be included in a different release to
protect the integrity of the year-end software. We do not expect
you to see any real changes until the RTI compliant releases in
2013.
Will I be able to attend any IRIS training courses in the
future?
Yes, we are delivering RTI seminars from June 2012 to ensure you
are fully aware of all the changes and what impact it will have on
your payroll.
Confirmed training dates and
locations for GP (General Practices) and SME (Business).
Can't find a date or location to suit you, register here and we will let you know when
there is a course near you.