April 6th 2013 PAYE in the UK is undergoing its most fundemental change since its inception in the 1940's. Please see our fact shet for more information

1. NOT JUST GOOD WITH NUMBERS
CHARTERED CERTIFIED ACCOUNTANTS | REGISTERED AUDITORS
RTI - Real Time Information
The PAYE system is about to go through its most fundamental change since its inception in 1944.
PAYE impacts upon almost every employer in the UK and the changes that will take effect from
April onwards are mandatory and it is important that business owners understand these changes
and take action prior to their inception date. Individual employer’s introduction into the new
working practices will be phased in from April with all employers being enrolled by October 2013.
What is RTI?
RTI or Real Time Information is a new system being introduced by HMRC to improve the operation
of PAYE. Moving forward PAYE will be collected on a more frequent basis as employers submit
their regular payroll submissions. It means that employers will send HMRC information relating to
PAYE, NIC, and student loans every time they pay their employees rather than with their end of
year return.
There are four key reasons HMRC is introducing RTI;
1. To create a more efficient response to PAYE errors including under or over payments
2. To assist with the reduction of fraud and ensure people are receiving the correct
benefits they are entitled to.
3. To support the introduction of Universal Credits, which will streamline benefits into
one payment.
4. To provide the Department of Works and Pensions with up-to-date information
relating to individuals employment income.
What do you need to do now?
It is important that you begin the process as soon as possible of checking that you have the full
and correct details relating to your company and employees. The information you need to be
collating is-
• Accounts office reference
• Full company name and address
• The correct tax district and reference number
• Correct full forename and surname for all employees - David not Dave, Samantha
not Sam
• Double barrelled forename or surname will need to be entered in full
• Correct date of birth in the format DD/MM/YYYY - NO default date of birth such as
01/01/1901
• The employees correct national insurance number
• The employees gender

2. NOT JUST GOOD WITH NUMBERS
CHARTERED CERTIFIED ACCOUNTANTS | REGISTERED AUDITORS
• The hours normally worked by employees
• Add all new employees to the payroll
• Process all leavers in this tax year
What will happen at migration?
1. You now have checked all of your company and employee details are complete
and correct
2. HMRC will notify you of your migration date only 4-6 weeks in advance
3. At Migration you will submit your Employer Alignment Submission (EAS)
4. Add new starters who have joined since your initial EAS. Process and update your
payroll. Process leavers
5. Submit your Full Payment Submission (FPS) on or before pay day
6. Month End - Check if an Employment Payment Submission (EPS) is required on
or before 22nd of following month (When payment is due )
7. Ongoing FPS & EPS submissions
8. End of year process No P35’s only P60’s under RTI - P11D’s still need to be
completed.
*The information you provide concerning employees will be checked HMRC’s stored
records and National Insurance records every time you pay your employees.
Glossary of Submission Forms
Employment Alignment Submission - A one off submission which HMRC will use to match
against existing Company and employee records it holds. Businesses employing less than 250
employees do not have to submit an EAS but can volunteer to as it will give you a rejection
message or successful message allowing you to prepare further for your first FPS if information is
not correct.
Full Payment Submission - FPS covers the employee payments and deductions and every time
you pay your employees, along with the hours worked. HMRC will use this submission to calculate
how much PAYE and NIC is due from your business. Under payment and catch up payment will
no longer be acceptable. Casual workers are now to be added to the payroll and form P38A
will no longer be needed.
Employment Payment Submission - Used to inform HMRC of any alteration to your normal
liability when reclaiming statutory payments or entering a nil return. CIS figures and Employer NIC
Holiday Scheme details will need to be included on this submission.

3. NOT JUST GOOD WITH NUMBERS
CHARTERED CERTIFIED ACCOUNTANTS | REGISTERED AUDITORS
We recommend
• If you outsource your Payroll speak to your provider as soon as possible. Ensure
that their product will meet your individual requirements and find out in advance
what extra information they will require and when.
• If you run your own payroll you will need to check with your software provider as
early as possible to see if it is RTI compliant, and to arrange training as appropriate.
• Take steps now to review all payroll information you hold for your Employees to
make sure that the basic information is correct (name, date of birth, National
Insurance number, and gender). Shortened names, and default date of birth entries
will no longer be allowed.
• Consider enrolling your payroll staff on a training course geared towards RTI
compliance, or as a minimum ensure they have sufficient time to prepare and update
their knowledge.
• Look at your systems regarding leavers and starters; are these procedures robust
enough for RTI? You may want to introduce new systems for collecting data,
associated training, and agreeing who is responsible. Pay particular attention to
those who have changed address, or may have married recently.
• The number of hours worked hours will now need to be submitted in detail, so it will
no longer be acceptable to just run a payroll stating 1@ £250.00. Review your
practices regarding national minimum wage, working time directive and consider
what impact this may have in regard to part time workers on benefits.
• Form RTI46 will replace P46 and this will need to be completed for new starters
even with a valid p45.
• Early communication to employees is important to ensure that they are forthcoming
with the required information in a timely manner. Also Staff handbooks may need to
be amended to reflect the changes. If employees understand why you need more
information, and how it affects your ability to pay them promptly, they will be more
likely to comply.
• Identify any potential difficulties in complying with the changes, think in practical
terms about your business and consider the risks right now. If you have frequent
pay runs this may incur extra resource, as will payments that are made for example
at weekends or in the evening (as the information will still need to be sent in
REAL TIME).
• Consider whether you will need more resource when completing the first few payroll
runs under the new system, and potentially even for the long term. For those who
run weekly payroll the increased workload will be more significant, along with those
who have high numbers of casual workers.

4. NOT JUST GOOD WITH NUMBERS
CHARTERED CERTIFIED ACCOUNTANTS | REGISTERED AUDITORS
• Factor in the financial cost of implementation of RTI, and what this will mean for your
business. Consider extra staff resource, training, your extra time in planning, and the
cost of any new software required. It may be worth considering outsourcing your
payroll if you do not already do so, as this may actually be more cost effective than
the cost and impact of implementation.
• If you currently make quarterly or annual salary payments (for example Directors
pay) you will no longer be able to do so. If an employee is not paid on at least a
monthly basis HMRC will pick up on this via RTI reporting an automatically process
them as a leaver.
The information and changes we have described in this fact sheet are important as HMRC will be
applying penalties for late or inaccurate submissions. If you are concerned over any of the
information we have presented or would like an assessment on your individual readiness please
contact us on 0845 894 8966.