Starting in April, 2013 U.K. employers and pension providers will be required to report their payroll information to Her Majesty Revenue & Customs (HMRC) in a new way. HMRC is the U.K. equivalent to the IRS. By October, 2013 most employers will need to be using RTI.
As part of the payroll process, employers and pension providers will submit electronically to HMRC information about all payments and deductions they make to employees or pension recipients each time they are made. The previous reporting was yearly at year end. The HMRC launched a pilot program starting in April 2012 to begin testing the new system. Employers could volunteer to participate. Information about joining the pilot program can be found here.
Moving to RTI will simplify the PAYE process, making it easier for both HMRC and employers to administer payments and reporting.
RTI will change the way year-end works. Employers will still be required to provide employees with year-end wage reporting statements (P60s and P11D and P11D (a) forms for taxable benefits and expenses). Under this new process employers will no longer be required to complete annual filings of PAYE tax and National Insurance contributions. Also, P14 and P35 submissions and P38A returns for Casual employees will no longer be required.
UK Employers and service providers need to be ready to comply with this new initiative. It will take some planning and some IT initiatives. The change is coming so are you ready?
Additional information can be found at: http://www.hmrc.gov.uk/rti/index.htm