Under RTI, employers and pension providers are required to submit the Tax and NI deductions made from an employee/pensioner at the point the payments are made.
The information to be submitted via RTI is the same information as submitted at the end of the tax year, i.e. employee’s personal information (names, addresses, dates of birth, NI numbers etc), gross pay for tax and NI, tax deducted, NI deducted and employer’s NI due.
Information submitted via RTI must be in a prescribed format to meet all checks when passing through HMRC’s systems.
This submission must be made online via the Government Gateway and most commercial software packages will be updated to allow for these submissions to be made directly via the software.
However, it may be worth checking with your payroll provider that the switch to RTI is possible and clarifying any additional work and costs required to ensure this transition is seamless.
Eventually, moving to RTI will eliminate the need for P35’s and P14’s to be submitted by employers each year. However, the requirement to issue a P60 to employees/pensioners will remain.
In the coming months, HMRC will issue Employer Alignment Submissions to all employers with a deadline date for the first submission under RTI.
The first submission under RTI will include all payments made in the tax year up to this point (including any leavers).
Subsequent submissions will then be required every time a payment is made to staff, detailing the payment made at this point.
Once you begin to operate RTI, all information must be sent on time to HMRC to avoid substantial penalties.
HMRC will be able to track the submission dates via the BACS payments made to employees for the net wages.
It is anticipated that in the early stages of this process, penalties may be waived to allow time for the new system to become operational, however this has not been formally communicated by HMRC.
In practice, when the new CIS system was implemented, HMRC allowed a grace period of 6 months before they began to charge penalties for late submissions.