In April 2012, HM Revenue and Customs (HMRC) introduced Real Time Information (RTI) to improve the operation of Pay As You Earn (PAYE). This significant change aimed to modernize the PAYE system, making it more efficient and accurate. In this article, we will explore the key aspects of RTI, its implementation, and its impact on employer reporting.
RTI is a system that requires employers to transmit tax and other deductions information to HMRC in real-time. This means that employers must report employee earnings, tax deductions, and National Insurance contributions as soon as they are made, rather than at the end of the tax year.
The introduction of RTI has eliminated the need for several forms, including:
Instead, employers are required to submit a Full Payment Submission (FPS) to HMRC on or before payday, which includes details of employee earnings, tax deductions, and National Insurance contributions.
Since April 2014, all employers have been required to report in real-time, covering 1.9 million schemes and 48 million employees. This means that employers must:
The implementation of RTI has brought several benefits, including:
Real Time Information has revolutionized the way employers report employee earnings and tax deductions to HMRC. By understanding the key aspects of RTI, employers can ensure compliance with HMRC regulations and take advantage of the benefits it offers.
Whether you're an SME or a large enterprise. We do payroll! We have a solution that fits your needs.
Give us a call, or drop us a message. We're available to help you. Any time.