1. Employer PAYE changes – moving to Real Time Information (RTI) – April 2013
From 6 April 2013 employers will have to start reporting PAYE information to HMRC in real time. You
may see this referred to as Real Time Information - or RTI.
This means all employers (or their accountant, bookkeeper or payroll bureau) will have to:
1) Send details to HMRC every time they pay an employee, at the time they pay them
2) Use payroll software to send this information electronically as part of their routine payroll process
Key changes for PAYE under RTI
There are three main changes that will happen under RTI:
• Employers will be required to send information to HMRC about employees’ pay and
deductions before or at the same time as they are paid by way of a ‘Full Payment Submission
(FPS)’. This information will be sent electronically using either:
- HMRC’s free software for small employers – the Basic PAYE Tools
- the internet via the Government Gateway
- EDI (Electronic Data Interchange)
• The year end process of submitting P14s for all employees and a P35 summary and employer
declaration will no longer be required.
• Employers will retain new starter forms P45 and P46 but will not be required to send them to
HMRC.
While no employers will be exempt from RTI, a small number who are exempt from online reporting
and filing will have to comply with a slightly different set of RTI requirements.
Getting ready for the changes
All employers should be preparing for RTI now. Payroll agents should be alerting their clients as the
employer is responsible under the RTI regulations for getting their RTI submissions right and on time.
There are five key areas where employers need to act:
1) Check current employee records: Ensure your payroll system, or your payroll agent, has
official names, dates of birth, gender and, the correct National Insurance Number for all your
current employees.
2) New pieces of employee information required:
a. Normal hours worked - This is a new piece of information required to be reported for each
employee for each payment run. The Normal Hours Worked are the contracted hours as
defined by the DWP.
b. Passport number - Where an employee is from outside the United Kingdom, the
employee passport number should be obtained and recorded against the employee for
submission in the RTI data.

2. c. Irregular payment indicator - This needs to be set for employees who are not paid on a
regular basis.
- When HMRC has not received any RTI information for an employee for over 13
weeks their systems will assume that the employee has left that employment unless
the Irregular Payment Indicator has been received in that employee’s last RTI
submission.
- Employees paid quarterly, half-yearly or annually should be indicated as being paid
irregularly.
- Employees on maternity leave should be indicated as being irregularly paid if they
intend to take a further 13 weeks of unpaid maternity leave.
d. Payroll ID - This is a new field that is essentially a ‘submission identifier’. It should be
used when an employee has two separate employments with the same employer,
which are paid in separate payments, so that HMRC can tell which payment is for
which employment. It is NOT the employee payroll number.
3) Business Processes: Check that your business processes are robust so your payroll
accurately captures new employee’s name, date of birth, gender, and, NI Number, before
they are first paid.
4) Software Supplier: Check with your payroll software supplier, or your payroll agent, their
timetable for complying with the RTI regulations. (*can help)
5) BACS Payments: If you pay your employees through direct BACS (not the same as internet
banking), check that your payments software provider can accept and submit revised file
layouts from your payroll software.
Free Payroll Health Check Review
KSA is offering all potential clients a FREE NO OBLIGATION RTI Payroll review service. We will visit your
premises and review your payroll to provide guidance on getting ready for the introduction of RTI.
Contact us now to arrange your free review: company@ksaassociates.co.uk or call Kevin on: 07980 873444
Further information on RTI is available on the HMRC website:
http://www.hmrc.gov.uk/payerti/getting-started/index.htm