Starting in April 2013, HMRC will be requiring employers to submit payroll information in real time (RTI) rather than making an annual submission after a tax year has ended. From April 2013 a submission to HMRC needs to be made at or before the time of payment to employees, so this may be a weekly or monthly activity depending on the frequency of the payroll runs.
Before the new tax year starts on 6th April 2013, it is important to get prepared; if an employer is running their payroll in-house they need to check that the software is RTI compliant or if the payroll is outsourced that the payroll provider is ready for RTI.
As part of the preparation for RTI, employers need to ensure that they have accurate and upto date information about all their employees including:
- Name
- date of birth
- gender
- address
- national insurance number
Employee names should be their legal name and include any middle names. For example if a Frederick Simon Smith is currently included as Fred S Smith, the name should be amended to his full name.
From the 6th April 2013 additional information will need to be reported to HMRC as part of the payroll such as
- hours worked
- employee information for temporary, casual workers and employees paid below the national insurance Lower Earnings Limit (LEL)
The information submitted by employers (or their payroll providers) will mean that HMRC will hold current information about earnings and so there should be fewer incorrect tax codes for individuals. This information will also be used to assess payments under the new Universal credits. All employers regardless of their size will be required to operate RTI during 2013-14.
