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Date of publication: October 2018

Real Time Information

Real Time Information (RTI) is the way PAYE is reported to HMRC.

Previously, at the end of each tax year we collated 12 months payments and deductions in the form of P35’s and P14’s and submit them to the tax office.  From April 2013, we have been required to submit PAYE information electronically every time we make a payment to HMRC.

There are no changes to the way tax or National Insurance are going to be calculated, just in the way it is declared. 

Why do we need RTI?

Fundamental processes within the PAYE scheme have remained the same since its introduction in 1944.  68 years later, the Chancellor of the Exchequer decided that he needs to drag the system into the 21st century.

The modernisation of RTI means that HMRC will hold a master record for each taxpayer, allowing the HMRC to manage up- to- date information, the benefits to HMRC include:

  • Reducing  the likelihood of under or overpayments of tax;
  • Enables the NI and PAYE Service (NPS) computer system to ensure welfare and tax credits are less prone to error, fraud or overpayments;
  • Support the payment of universal credits;
  • Allows HMRC to pursue HMRC payments more effectively and charge penalties and interest for late payments.

P11D forms – taxation on benefits in kind, are still going to be processed manually and therefore underpayments of tax as a result of receiving taxable benefits are still going to be taxed up to a year in arrears.  P46 (car) forms can be submitted in order to reduce the time lag of tax payments on company cars.

What information is sent to HMRC?

Every time an employer makes a payroll payment to an employee, a submission is made to HMRC on or before the payment date which contains a wide range of information:

  • Employer information
  • Employee identity information
    • Full name (no shortened names)
    • Address
    • Date of birth
    • Current gender
    • NINO
    • Passport number
    • Hours worked (in bands)
    • Tax code, NI category
    • New Starter Declaration information
  • Employment Details
    • New starter information which is to replace the submission of Forms P46, P45 and P46 (expat)
  • Leaver Information
  • Pay and Deductions
    • Gross payments
    • Statutory payments
    • Tax deducted
    • NIC paid
    • Net payments

All employees, however little they are being paid, must be reported on, this will therefore make the P38’s redundant.
For clients where Oury Clark process their payroll records all of the above will be maintained in our system and will be substantially automatic once the data has been initially aligned.

Next Steps

Before the first submission of RTI data each payroll scheme must “align” their data with HMRC.  The tax office have stressed that it is the responsibility of the employee to ensure HMRC have correct and accurate personal information.

Here at Oury Clark as part of our payroll service we will ensure that your company is fully compliant with RTI, we will liaise with our clients to agree how the alignment may be best achieved.

If we do not run your payroll but you would like additional advice on aligning your data or other aspects of RTI please get in touch and we will be happy to assist.

PAY 2

Disclaimer: This note does not contain a full statement of the law and it does not constitute legal advice.  Please seek legal advice if you have any questions about the information set out above.

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