RTI – what’s it all about?
So you’ve received a few mailshots about RTI and we're told “you must do it otherwise you’ll be fined” – the last point has probably persuaded you!
So what is RTI? For those of you who have any doubts, it’s here to stay. It is not a new illness or a new drug – it is something HMRC believes will make everybody’s lives easier. Really? Since when do such initiatives make your life easier?
Don’t panic, smaller businesses have slightly more time to adapt to the HMRC’s new Real Time Information plan whereas some of the larger companies have to comply now.
So what is RTI? And how will it affect you and your business?
Currently, employers report employee’s tax and National Insurance to the HMRC monthly. However, times are about to change. People are changing jobs more frequently than ever before, so the PAYE system sometimes struggles to ensure that tax codes are up to date.
Under the new RTI initiative, employers will have to report NI and income tax deductions every time they pay staff, not just once a month. Until October small companies (<50 staff) can send information to HMRC by the date of their regular payroll run, but no later than the end of the month. So in effect it is just an electronic update whenever you do something with your payroll – and thus it should be pretty easy (if your systems are properly set up)
RTI does make sense. There is no time like the present and even if you are not convinced there is no point wasting time arguing whether RTI is a good or bad thing, you simply need to accept that it’s not going anywhere and embrace it. For businesses larger than 50 staff, RTI began on 6th April. If you have less than 50 staff, you should start adapting now to avoid potential fines come April 2014.
If you would like to find out more, pick up the phone and speak to your accountant – in this instance we’ll plug ourselves. As I mentioned above the key is to set up your systems properly and you’ll save time
Contact us to find out more RTI and we can advise the best plan of action