From next April HMRC are introducing a new regime for the receipt and processing of payroll information called Real Time Information (or RTI). RTI is being introduced as part of HMRC’s continued modernisation of its services, and aims to make sure the payroll and tax information held on every employee of every company in the nation is as up-to-date as possible.
Instead of submitting tax forms at the end of every year, employers will be required to send HMRC payroll information on or before every single payday, meaning the figures held by HMRC are always as up-to-date as possible.
It may sound simple, but RTI has been described as the biggest shakeup to the payroll sector since the introduction of PAYE. The stakes are high, too – any company not meeting their RTI requirements will face monthly fines from HMRC!
RTI is such a shift that many payroll packages are now essentially useless are being scrapped (such as Sage’s TAS Payroll), to be replaced by packages rebuilt from the ground up to support the new rules.
If you and your business have not begun to prepare for RTI, the time is now! Those using larger accountancy packages should be receiving updates to their software that makes them RTI-compliant, while those using online accountancy packages should see the RTI updates come into effect seamlessly.
Unlike the continuing rollout of pension auto-enrolment, which will not be a requirement for smaller businesses until 2014 onwards, everyone must be prepared for RTI come April – meaning for many freelancers and micro-businesses may have to invest in payroll software for the first time.
Our blog content this week was provided by Crunch Accounting:
If you would like to know more about RTI and how to make your business a profitable AND tax-efficient one, come along and join in the workshop that Crunch accounting are running with Wired Wessex on 13th March 2013 where RTI, tax efficiencies, and tackling mortgages and pensions will be just some of the tips to pick up on. Here’s the link to more information about it:
and if you want to get the flavour of what RTI is all about, here is the lonk to basic information about in on HMRC’s website
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