RTI – the new payroll regime

Real Time Information (RTI) will become mandatory in APRIL 2013 and all employers, without exception, will be directed to join from April 2013 through to October 2013 when every UK employer will be required to use the RTI reporting system.

Main changes for PAYE under RTI

All employers and pension providers will send details of all payments made (or to be made) through the payroll irrespective of the amount of pay (or pension).

Employers will be required to send information to HMRC about their employees’ pay and deductions, before or at the same time as they are paid.

The year end process of submitting P14s for all employees and a P35 summary will no longer be necessary and neither will the requirement for submission of the P38(A) annual return.  There will still be a requirement to submit an employer declaration.

The starter and leaver process is to be overhauled and under RTI, employers will not have to complete and send a form P46 for new employees to HMRC.

HOWEVER the information that is asked for on a P46 form must still be obtained by the employer for any new employee that does not provide a P45.  HMRC have produced a new form P46short that covers the information required but does not need to be signed by the employee (a copy of this is attached)

The P46(Expat) form also ceases and the future of the P46(Pen) is currently under consideration.

• All individuals classed as employees have to be put through the payroll.  This includes anyone that would normally have been able to complete a Student Declaration Form P38(S) as well as any casual employees that you would have declared through a P38(A)form.
• If your payroll is run for anything other than weekly, fortnightly, 4 weekly or monthly – or indeed if you have any employees within a payroll that is paid outwith these periods, then you may have to process them in a different way than you currently are.  Similarly if you have individuals who in any pay period you are not processing a payment to them you may need to deal with them differently.  You will certainly have to submit information to HMRC through RTI at least every 3 months and you may find it easier to do so monthly.

Under RTI : –

1. Any individual who is not to be paid in one of their normal pay period (e.g. monthly) then you must put them on hold (this should be an option available on your payroll programme).  This means that they will not be included in the payment processing but they will be included in the information submitted to HMRC.
2. Any individual who is not paid in one of the four pay periods mentioned above must be marked as being on hold during the other periods of the tax year.  i.e. if you have an annually paid individual that you process in March then you must mark them as being on hold from April through to February.