Between April and October 2013, almost all employers must make the switch to submitting their PAYE returns using Real Time Information (RTI). This applies even to the smallest employers. RTI usually means that PAYE information must be reported to HM Revenue & Customs (HMRC) ‘on or before’ the point the payment is made.
RTI means that you must submit a full breakdown of your payroll every time you run the payroll. This is usually completed automatically by the payroll software.
Employers who must comply with RTI should have received a letter from HMRC setting out the requirements.
In recent months, some further details have emerged about RTI:
- A new system of penalties is to be introduced for non or late compliance. This will not apply until the 2014/15 tax year, but you should establish all necessary disciplines before then. Other penalties still apply for late payments or returns.
- The P38(S) student declaration system can no longer be used from 6 April 2013. This allowed students who worked only in the main vacations and earned less than the annual personal allowance not to have tax deducted at source. Now they will have tax deducted and may be able to claim it back after the year-end.
- HMRC has confirmed that expatriate employees must have their PAYE accounted for under RTI. This applies even where the payment comprises solely of an annual bonus. There are some practical issues in operating RTI for expatriate employees on which we can advise.