You’ve probably heard the acronym RTI being used, especially by those involved in payroll processing.
Real Time Information. This is a major change by HMRC which can be made because of current IT technology and widespread use of the Internet. It provides some benefits: constant update of data with HMRC to reduce the year-end adjustments, data accuracy to ensure NI and tax records are attributed to the right person, reduction of paperwork and it helps with the introduction of Universal Credit.
It has already started. There was a lot of testing going on after April 2012, but RTI went live in April 2013. Employers are now legally required to report PAYE in real time. This means that information about all PAYE payments needs to be submitted to HMRC online each time a payment is made, as part of the payroll process, rather than at the end of the year (P35 and P14) as they are now. Even the P45 Part 1 information for Leavers will no longer need to be sent to HMRC, as the data will be provided by the RTI data transmission.
Whilst it looks as if it’s a payroll function, in most cases the original data comes from HR.
It’s important that the data you hold in your HR records, which are passed to Payroll, is complete and accurate. You must check and, if necessary, update the data for all your employees or pensioners – certain details such as Name, Date of Birth and National Insurance Number, are essential and must be in full and correct – spelling accuracy is critical.
What should HR be doing?
If you don’t already do it, make sure that, for new starters, you have documentary evidence of NI Number, Address, Birth Date and Full Name. That might mean asking for a passport, driving licence, HMRC document, P60 etc. For existing employees it would make sense to ask them to check their data via the self-service function (e.g. CIPHR Net) or maybe use CIPHR functions such as emails, mail merge letters or reports to show what is currently held and check it is correct.
Depending on your Payroll software supplier you might need to maintain additional data in CIPHR and modify any Paylink configuration to allow for e.g.
- Passport number (you are probably collecting this as part of your Right to Work checks)
- Irregular Payment (e.g. long term sick)
- Normal Hours band
Therefore, it is worth checking with your Payroll software provider that their solution is able to comply with the necessary changes to be implemented, in order to comply with RTI and find out what additional information they might need HR to capture and supply.
To find out more about RTI, please visit www.hmrc.gov.uk/rti/index.htm