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What is RTI?

Here at BT Business Direct Blog we pride ourselves on bringing you IT news that will impact the way your business will operate in the future, usually it’s either a new operating system or gadget that will help you stay ahead of the competition. However this week’s blog will help you stay legal, by simply using a new piece of software from Sage.HMRC Logo

HMRC are changing the way that employers pay their employees’ Income Tax and National Insurance. The Pay as You Earn (PAYE) system which has been used since 1944, is open to errors and sometimes fraud, so to eradicate these problems and make the system more efficient, HMRC are introducing Real Time Information or RTI as it will be known.

What is RTI?

Real Time Information, or RTI, is a new system that HMRC is introducing to improve the operation of PAYE. RTI will mean that PAYE information is collected every time an employee is paid rather than annually when a business submits its end-of-year tax return. When the employee’s PAYE data is submit each payday, it will be checked against the PAYE data that HMRC holds on that employee, this will highlight any errors or changes that have occurred since the last payday, making it quicker and easier to resolve.

RTI means that employers will send data about PAYE, NIC and student loans every time they pay their employee

Why is HMRC introducing RTI?

HMRC is introducing RTI for a number of important reasons.

  • To enable a more efficient response to PAYE errors such as under or over payments.
  • To support the introduction of Universal Credits, which will streamline benefits into one payment.
  • To reduce fraud and ensure people receive the benefits they’re entitled to.
  • To provide the Department for Work and Pensions with up-to-date information about each claimant’s employment income more efficiently.

RTI will be introduced from April 2013 and will become mandatory for all employers from October 2013

Preparing for RTI

To prepare for the fast approaching RTI legislation, you need to make sure that all the information that you hold on employee is accurate, so that when RTI comes into place, they are no incorrect tax calculations.

RTI: How Sage can helpSage RTi Ready

Sage has worked very closely with HMRC, investing significant resource in ensuring Sage Payroll solutions are RTI-ready. This is why Sage Instant Payroll and Sage 50 Payroll have been officially recognised by HMRC as RTI-ready.

Sage will also ensure that all customers with a valid SageCover support contract will receive software updates that will make the transition to RTI straightforward and hassle free, giving you one less thing to worry about.

Go to the Sage RTI page on our website and take the RTI test to see if your business is RTI ready, and also read the free handy guide to learn more about RTI legislation.


Sage 50 Payroll

Sage 50 Payroll Explore RTI Edition

Sage Instant Payroll RTI
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