Introducing Real Time Information

Monday 3rd September, 2012
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After the introduction of Agency Worker Regulation in October 2011, we have been busy preparing for Real Time Information (RTI).

PayStream is part of the HMRC pilot scheme. This provides us with HMRC direct support and the reassurance to know we are submitting correct data.

If you unsure what RTI is, then here is some background for you.

Q. What is RTI
A
. Employers will have an obligation to inform HMRC about tax, National Insurance contributions (NICs) and other deductions when payments are made, instead of waiting until after the end of the tax year. Information will be exchanged from the employer in real time.

Q. Why change the PAYE system?
A.
Pay As You Earn was introduced into the UK in 1944 to replace the existing annual or twice-yearly collections of tax. Back then employees tended to remain within the same employment from leaving school to finishing their working career. This is no longer the case and HMRC are not always informed of employees' earnings within a tax year which can result in over or under payments of tax that are not highlighted until the tax year end. The purpose of RTI is to ensure that more employees will pay the right amount of PAYE and National Insurance in the tax year.

Q. Does RTI apply to the self-employed?
A.
No - it is for PAYE employees only

Q. What does this mean to PayStream?
A.
PayStream has had to implement robust controls and warnings to ensure compliant data for certain fields such as 'name' because nick names or preferred forenames are not accepted. As such we are currently undertaking a data cleanse exercise to ensure all Mike's are changed to Michael and Maggie's are changed to Margaret, etc, where appropriate.

Q. What does this mean to our contractors?
A
. As our employees or if we represent your limited company, you will see no obvious difference as PayStream will do all the work for you. The only difference to you is that as HMRC will have your full year employment history so you should never pay too much tax again.

If you are interested to find out more about RTI, further information is available on HMRC website http://www.hmrc.gov.uk/rti/index.htm or by emailing sally.burton@paystream.co.uk.


PayStream is part of the HMRC pilot scheme. This provides us with HMRC direct support and the reassurance to know we are submitting correct data.