Get ready for RTI
- Published on Wednesday, 06 March 2013 15:49
- Posted by Vicki Mitchem
With just one month to go until the start of the biggest shakeup of the Pay As You Earn (PAYE) system in nearly 70 years, HMRC is urging employers to get ready.
From 6 April, employers will be required to move to a new way of reporting PAYE called RTI where they report each time they pay their employees, rather than annually. This updates the PAYE system so that it is quicker, easier and more accurate.
With the introduction of RTI, employers will benefit from much simpler requirements for reporting to HMRC and the abolition of the extensive annual tax return that the old system required. Savings to business will total £300 million in reduced administration costs once the system is up and running.
For employees, particularly the million people in the UK with multiple jobs, RTI will bring benefits as HMRC starts to get details of their tax every time that their wages are paid, rather than just once a year. This will make HMRC's records more accurate and up-to-date and will begin to reduce the number of cases where someone is found to have under or overpaid tax during the year.
David Gauke, Exchequer Secretary to the Treasury, said:
Real Time Information (RTI) will be better for employers, better for employees and better for Britain. This is the biggest revolution in PAYE in around 70 years and will reduce the costs of administratiion for businesses by around £300 million every year.
Employers can find all the information they need about the new system on HMRC's website and small businesses can download free software to help them get ready. So whatever the size of your business, wherever you are based, whatever you do - if you employ people, it's time to get ready.
Richard Burchell, owner of Burchells Fleet, a chiropodist with 6 employees already using the new RTI system, said:
We have been part of the pilot since June last year and have had no trouble with RTI at all. The key is to get good software and make sure your data is up to date.