Under HMRC's Real Time Information (RTI) proposals employers are to be required to send HMRC information about tax and other deductions from employees in year.
RTI is essential for the operation of the government's Universal Credit, which is set to replace the current system of tax credits.
- RTI will place an additional in-year compliance burden on many employers.
- Many changes relating to employees (P45/P46 etc) are already required to be submitted online, as are end of year returns.
- RTI will require further reporting at the same time as, or before, each salary or pension payment is made, rather than at the end of each tax year.
As a result of feedback received to its recent consultaiton on RTI HMRC has made the following changes:
- The RTI service will be piloted with volunteer software developers and employers for a year, starting in April 2012.
- The majority of employers and pension provides will have to use the new service from April 2013.
- HMRC will accept RTI submissions through the existing submission channels, using the internet via the Government Gateway and EDI, regardless of the method used to pay employees. The EDI channel is a transitional arrangement and will run until at least April 2014.
This timetable is intended to ensure that software developers have time to develop their software products, and give employers time to adjust their payroll processes.
The Bacs channel remains HMRC’s strategic choice for employers who pay their employees by Bacs. HMRC will publish more information about the timetable for introducing this later in the year.
Legislation in the form of draft PAYE Regulations will be published for consultation in autumn 2011.
Editorial comment:
It is noted that according to the consultation that government is committed to ensuring that fast Broadband reaches rural areas by 2015. It is assumed (but not thus far mentioned) that there will be some form of "soft landing" for those in rural areas between 2013 and 2015.
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