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The Introduction of RTI

20th February 2013


Coach Operators are you ready for the Real Time Initiative (RTI) which is the biggest shake up of the PAYE system since its introduction in 1947.  The changes introduced will mean additional work for all payrollers/businesses.  In the past if you made a mistake then you may have been able to rerun a payroll and make amendments retrospectively, this is not the case from April 2013.  Prior to paying your staff you will need to have sent the payroll data electronically to the Revenue, if your employee data is not accurate then the information will fail the government gateway and in theory you should not pay your staff.

 

Coach Operators/Employers should now check the data they hold on file for their staff and ensure that the following information is correct:

Employee name is it their official name ( the name known by the Revenue) i.e Debbie may actually be Deborah.

Date of Birth

National Insurance Number

Full postal address – it is the employee responsibility to ensure that the Inland Revenue are informed of any changes

Marital status

Hours worked

Once the Coach Operator has ensured that the existing data is correct, he/she must ensure that it is kept up to date. 

Currently there is a facilitiy to send your data for payroll cleansing to the Revenue to ensure that your records will be acceptable.

 

Change for new starters from April 2013 is that even if an employee provides a P45 they should also fill in a P46 and ensure that the box YOUR PRESENT CIRCUMSTANCES is ticked appropriately and signed.  The idea is that when the data is sent to the revenue electronically the correct tax code can be applied with as little time delay as possible.

Once you are happy with the period payroll be it weekly, monthly, etc the data must be submitted to the Inland Revenue for verification.  Once data is accepted you can then pay your staff.

 

Benefits for the Inland Revenue:

Monthly/quarterly payments of PAYE will be accurate.  The revenue will match up amounts paid to them on the 19th of the following month with the payroll data submitted.  Currently if an employer does not pay over the exact amount the Inland Revenue would not be aware, unless they conduct an audit.

Tax codes should be updated quicker and therefore there will be less chance of an employee owing or being owed large amounts of tax.

Eventually the benefits system will be linked to the Inland Revenue, which is hoped that the new Universal Tax Credit system will be more accurate.  Other advantages will be to tie up with the Child Support Agency and where maternity leave/pay is transferred between partners.

No year end balancing – as the payroll must be balanced monthly.

 

Benefits for the Coach Operator/Employer

 No year end balancing – as the payroll must be balanced monthly.