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RTI Payroll has been introduced which is expected to change the way PAYE reporting was being made till date. Under this recently introduced system, employers are required to file electronic reports of their employees’ tax, insurance payments and other related information every single month. In this way, any errors being made in tax and insurance payment calculations can be figured out very quickly, making the overall process of tax filing a lot simpler for the employers which earlier used to consume a significant amount of their time. RTI Payroll has been in effect from the 1st of April, 2013. It would become obligatory in a few months’ time, October 2013 to be exact. Therefore, as a business owner, you must make sure that any payroll software you purchase should be in accordance with the new system. Small business owners with less than nine employees can, however, make use of the free tool introduced by HMRC, which is actually a very basic version of the payroll software. All the employers will be notified by the department a month in advance to operate the system. ">With the introduction of the RTI payroll system, every employee working in the UK is now being paid through a revised scheme called Pay as You Earn (PAYE). What that basically means is that both the income tax as well the insurance contributions made by the employees would be deducted at source from his or her salary by their employers. It is now the employer’s responsibility to collect the tax deducted at source and pay it over to the HMRC along with their insurance payments. All these deductions are made in accordance with guidelines which are issued on an annual basis by the HMRC (Her Majesty’s Revenue and Customs). Information related to end of year payroll returns as well as tax payer’s income tax return is also required for this purpose. Though the system is expected to work smoothly, as the older tax system had some flaws which had to be corrected for the smooth functioning of the entire system. One of the major problems with the older payroll was that a lot of inaccuracies might remain hidden till the very end of the year when returns are made. Therefore, the correct amount of tax can only be calculated and compared through Pay as You Earn right at the end of the year. It is to take care of this very problem that Real Time Information or RTI Payroll has been introduced which is expected to change the way PAYE reporting was being made till date. Under this recently introduced system, employers are required to file electronic reports of their employees’ tax, insurance payments and other related information every single month. In this way, any errors being made in tax and insurance payment calculations can be figured out very quickly, making the overall process of tax filing a lot simpler for the employers which earlier used to consume a significant amount of their time. RTI Payroll has been in effect from the 1st of April, 2013. It would become obligatory in a few months’ time, October 2013 to be exact. Therefore, as a business owner, you must make sure that any payroll software you purchase should be in accordance with the new system. Small business owners with less than nine employees can, however, make use of the free tool introduced by HMRC, which is actually a very basic version of the payroll software. All the employers will be notified by the department a month in advance to operate the system.
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