Are HMRC Prepared for RTI?
As many will already be aware, arguably the largest change to the UK tax system in 70 years has come into place; Real Time Information is a substantial step forward regarding the future of how we pay tax. Employers across the country will now be required to switch their current ways of reporting PAYE (Pay as You Earn) to the new system of 'real time' RTI. This is where an employer would report to Her Majesty's Revenue & Customs every time an employee is paid rather than an annual statement at the end of the year. This means that if someone is paid monthly, the employer would then inform HMRC monthly. This new system has been launched as an updated PAYE method that is quicker, easier and far more accurate than the previous structure.
The revenue themselves have proclaimed that with the introduction of Real Time Information, employers are going to benefit from far less unwanted obligation when it comes to reporting back to HMRC. With the dreaded annual tax return being a thing of the past, it will certainly be a far simpler and painless process for all involved.
Despite RTI having been boomed through our car radios every day for the past few months, and although adverts have been put up by the taxman all over our towns, there are some who are still quite oblivious to the new system itself, and not just the average employee! There has been speculation and in some cases criticism about the lack of information provided by the revenue, in particular concerning smaller firms. After some tweaking and fine tuning however, the Government is proudly heralding RTI as a huge, successful step forward.
David Gauke, Exchequer Secretary to the Treasury, has stated,"Real Time Information will be better for employers and employees. It will bring PAYE into the 21st century." This is a promising thought, and I'm sure that we are all hoping that RTI does indeed simplify things for employers. Despite this however, many do seem sceptical, claiming that HM Revenue and Customs may not have covered all of their bases. Ruth Owen, HMRC's Director General Personal Tax, boldy stated however, "This will be a year of transition. Employers will start to report PAYE in real time from their first payday on or after 6 April. We understand it may take some time before all employers will get into the routine of real time reporting. But HMRC is here to give help and support."
Tax changes are never met with optimism, and RTI has been no different in this especially as getting used to something new does mean there is room for error and as ever, late payments or under payments will be penalised.
With the initiative now up and running, only time will tell until we see how much of a difference stating 'Real Time Information' will have. As for its success or failure, once the new system has had time to settle into employer's working practises, it will no doubt be a welcome and needed change to an otherwise rather complicated area of tax.
The revenue themselves have proclaimed that with the introduction of Real Time Information, employers are going to benefit from far less unwanted obligation when it comes to reporting back to HMRC. With the dreaded annual tax return being a thing of the past, it will certainly be a far simpler and painless process for all involved.
Despite RTI having been boomed through our car radios every day for the past few months, and although adverts have been put up by the taxman all over our towns, there are some who are still quite oblivious to the new system itself, and not just the average employee! There has been speculation and in some cases criticism about the lack of information provided by the revenue, in particular concerning smaller firms. After some tweaking and fine tuning however, the Government is proudly heralding RTI as a huge, successful step forward.
David Gauke, Exchequer Secretary to the Treasury, has stated,"Real Time Information will be better for employers and employees. It will bring PAYE into the 21st century." This is a promising thought, and I'm sure that we are all hoping that RTI does indeed simplify things for employers. Despite this however, many do seem sceptical, claiming that HM Revenue and Customs may not have covered all of their bases. Ruth Owen, HMRC's Director General Personal Tax, boldy stated however, "This will be a year of transition. Employers will start to report PAYE in real time from their first payday on or after 6 April. We understand it may take some time before all employers will get into the routine of real time reporting. But HMRC is here to give help and support."
Tax changes are never met with optimism, and RTI has been no different in this especially as getting used to something new does mean there is room for error and as ever, late payments or under payments will be penalised.
With the initiative now up and running, only time will tell until we see how much of a difference stating 'Real Time Information' will have. As for its success or failure, once the new system has had time to settle into employer's working practises, it will no doubt be a welcome and needed change to an otherwise rather complicated area of tax.
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