Real Time Information or RTI as it is commonly known, is information about Income Tax, National Insurance contributions (NICs) and other deductions which employers will have to provide to HMRC in real time when payments are made, instead of waiting until after the end of the tax year. The purpose being to ensure that employees pay the right amount of Income Tax and National Insurance in the tax year. HMRC will start to mandate the use of RTI from April 2013 and all companies that run a PAYE scheme will be affected.
This article will help you to understand what it means to you as a contractor.
It is the umbrella company's responsibility to provide the information so if you are an umbrella worker there is probably nothing you will need to do. RTI does not change the PAYE rules so the amount of tax you pay will remain the same.
The only difference is that as HMRC will have your full year employment history, so you should never pay too much tax.
If you have your own PSC it is your responsibility to let HMRC know when you draw a salary. Your accountant will prepare the return for you provided you let your accountant know when you do draw a salary. At PayStream each PSC worker has his own portal so transactions entered update the company accounts and tax liabilities immediately. RTI returns will be system driven and are therefore not a problem.
For self-employed CIS workers there is no change to the current system whereby a 20% or 30% deduction is made from gross earnings and paid to HMRC. No further reporting is required on a real time basis.
If you are still unsure or have any questions regarding RTI then our customer care team are always on hand to help answer any questions you may have.