PAYE Real Time Information (RTI) Pilot Activates
HMRC has received the first returns from ten volunteer employers who have been piloting the new Real Time Information (RTI) programme.
RTI is supposed to make it easier for employers, pension providers and HMRC to administer PAYE. Under RTI, employers and pension providers will tell HMRC about PAYE payments at the time they are made – as opposed to only at the end of the year.
HMRC has indicated that most employers will have to enrol on RTI from April 2013 wile the service will be mandatory from October 2013.
A further 310 volunteer employers and pension providers will join during May and June. Subject to the initial pilot being successful, up to around 1,300 volunteer employers will be reporting RTI by September 2012.
David Gauke, Exchequer secretary, said: ‘RTI will ensure that the PAYE system meets the needs of the 21st century. It will improve the service to taxpayers by making it easier to ensure that people pay the right tax after a change of job.’
‘RTI will remove administrative burdens of £300m a year from employers, mainly from the abolition of the end-of-year PAYE returns process – the biggest single contribution that any tax change could make.’
HMRC iself is one of the initial ten volunteers participating in the pilot. Stephen Banyard, acting director general for personal tax, said: ‘The pilot will allow us to iron out any wrinkles in a small, controlled environment so that we can ensure RTI is working smoothly as more and more employers join the pilot.
'We are working closely with employers and the payroll industry but having HMRC take part in the pilot will allow us to see first-hand how it is working from an employer’s perspective.’
He added: ‘A specialist team of RTI experts will be on hand to support employers through the pilot.’
RTI will support the operation of the new Universal Credit benefit payments system, which brings together means-tested benefits, tax credits and housing benefits.
Minister for welfare reform, Lord Freud, said: ‘Interlinking Real Time Information with Universal Credit will enable us to process claims automatically and more efficiently, allowing us to make the right payment based on real time earnings.’
Details on the RTI pilot and scheme are available HERE