The basic change is that whereas companies currently send PAYE information to the HMRC after the year end, from April 2013 some companies will be sending PAYE information each payment period, and from October 2013 it is expected that ALL companies will be sending PAYE information monthly.
What this means for businesses is that the HMRC will be able to check that the PAYE information you send is correct, and also to chase companies for any amounts outstanding.
This from ;
Under RTI, employers and pension providers will tell HMRC about tax, National Insurance contributions (NICs) and other deductions when or before the payments are made, instead of waiting until after the end of the tax year.
- make the PAYE process simpler and less burdensome for employers and HMRC; for example by removing the need for the end of year return (P35 and P14) and simplifying the employee starting and leaving processes
- make PAYE more accurate for individuals, over time reducing the number of bills and repayments sent after the end of the tax year
- enable HMRC to pursue late payments more effectively
- support the payment of Universal Credits
- reduce Tax Credits error and fraud
Employers and pension providers will send this information to HMRC online for payments made to all their employees including those paid below the National Insurance Lower Earnings Limit.
We are not sure that this will make things simpler for employers as the end of year return isn’t that complicated anyway, and we suspect that more care will need to be taken that everything is correct before submission, as any problems will be difficult to correct, or even worse, attract penalties or investigations. It also means that you will have less leeway when it comes to sending payments before getting calls chasing money, which is never good news!