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Wages - Real Time Information - UK

Updated on July 10, 2013

HMRC Filing online Real Time Information

Online filing with HMRC can be filed in several ways.

Perhaps you, the employer, just want to log onto HMRC website and download their free Basis PAYE tools software - to file information. However this has limitations - employer can only use this if they have 9 or less than 9 employees.

Some wages software has the capability of filing info with HMRC. After the information is entered onto software and wages calculated, you can click on a button and send info to HMRC. This is probably quicker method to file than logging onto HMRC website.

The employer may wish to instruct their Accountant or agent to file wages online.

RTI is an online process where employers need to submit FPS (Full payment submission) forms on the day of wages paid to employee (or can file online before that date).

The information on FPS includes employee name, national insurance number, gross wages, deductions and any student loan information.

The HMRC will also gather from this online information how much the employer would owe to HMRC for paye - income tax and national insurance, and can keep a tighter control over non payments from employers.

Employers - changes from April 2013

Reporting PAYE to HM Revenue & Customs has changed from 6 April 2013.

From that date all employers have to inform HMRC on the same day as they pay their employees.

In practice this means that if an employee is paid on a weekly basis the employer has to inform HMRC each and every week of how much is paid.

The name given to this new change is RTI - Real Time Information.



Advantages and Disadvantages

Like everything in life there are advantages and disadvantages to RTI.

One advantage is that if employee code has to be changed then HMRC will inform the employer very quickly.

The employee is more likely to pay the correct amount of tax.

If the employee is receiving any benefit the HMRC can calculate correct amount of benefit payable.

Employee leaving - employee leaving is given a P45 by employer - the same information is filed automatically to HMRC.

End of Year - end of year forms no longer need to be filed with HMRC - as HMRC already have all the information gathered each week/month from employer.

However the employer has to inform HMRC in the same frequency as actual payments to employees. If employees are paid weekly then HMRC have to be informed each and every week of gross amount less deductions.

Cost and time - this new law requires the employer to file info with HMRC - this takes time, and a lot of employers do not have the facility to do this themselves. If an accountant or agent is engaged for this there will be a cost element to the employer.

Software - software may have to be purchased to enable online filing.

Once info is filed with HMRC it cannot be changed - so if employee overpaid, underpaid, sick etc - any changes have to be amended in the following week/month.

One advantage to HMRC is that they can quickly work out any employers who are not paying PAYE. HMRC can check position with employer and issue proceedings for recovery of money where necessary.


Filing Real Time Information

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There are a number of software programmes which can be used to file RTI with HM Revenue & Customs.

One such program is Moneysoft. It is easy to understand and provides various options for printing reports/payslips. It is used by thousands of small and medium employers, agents and accountants.

There are a couple of versions - one for a single employer, one version for multiple companies with less than 100 employees; and another version for large employers with up to 250 employees.

Other software programmes include Iris and Pegasus, Sage and Star computers.


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