Real Time Information (RTI) explained

From April 2013 the biggest change to payroll procedures for over 60 years came into force. From this date, employers and pension providers were obliged to file payroll information online to HMRC every time a payment subject to statutory deductions is made. Payroll software will simply collect the information and send it to HMRC online. It is compulsory to file your RTI PAYE data to HMRC on time – or you may incur penalties. Even if the salary or director’s fee you take is relatively small, the payroll has to be compliant with RTI. Even if your business is dormant RTI returns must be provided.

RTI implementation procedure

Information must be sent to HMRC about an employee’s salary and associated deductions before, or at the same time, the payment is made using Full Payment Submission (FPS).

1. There is no longer the requirement to submit P14s for employees or to submit a P35 summary and employer’s declaration.
2. P45 and P46 (new starter forms) will be retained by employers but employers are not required to submit them to HMRC.

The areas that won’t change for PAYE under RTI

• Employers will still have to issue P60s to employees.
• Benefits In Kind is not included under RTI. As an employer you will still be required to submit P11D, P11D(b) and P9D forms (if necessary) where applicable after the end of each tax year.
• The way in which HMRC calculate income tax and National Insurance Contributions remains the same as well as how payments are made to HMRC.

RTI implications for you

RTI may be relatively painless if you have the right support in place. It can be a challenge however, if you’re doing your own accounts and using non-compliant accounting software or spreadsheets to calculate payroll returns.

If you are a Brookson customer we will process your payroll and make the RTI submissions to HMRC. All relevant payments will automatically be submitted to HMRC.

You still receive a pay slip weekly in Connect, showing the payroll deductions, expenses processed and the amount submitted to HMRC. As the information is reported weekly you will need to ensure that you update Brookson when you don’t want to take a salary, for example, during periods of non-trade or if you are claiming statutory payments.