Real Time Information (RTI) has been introduced to improve the PAYE system by assisting HMRC in gathering critical data on a more frequent basis. In response to an article by Ian Whyteside that we published in November, AAT received a number of suggestions from its members. Aleem Islan, AAT’s Technical Manager, has the details
One of the first things you need to do to, before you even begin to consider the impact of RTI on your business, is talk to your existing software provider. It is important that you find out whether or not your software is currently RTI compliant or will be compliant before April 2013. This is when most employers will start operating the new PAYE process.
Feedback on the RTI pilot scheme
AAT members who had volunteered and taken part in HMRC’s pilot of the project felt that they had benefited. One commented: ‘I decided that we would join the pilot RTI to ensure my payroll staff had the best support and all was in place and understood before the rush. It has worked very well.’
Another member advised that their company volunteered for the pilot scheme, but had been told by their software supplier that they have not been accepted.
This only serves to illustrate the point above – that it is wise to talk to your software provider first. You can also find more information on joining the pilot on HMRC website.
RTI and payroll
Members also commented that the biggest exercise was the data cleansing process and what HMRC refers to as ‘payroll alignment‘.
To minimise rejection due to a mismatch with HMRC records, it is important that the payroll records are reviewed for any missing and incorrect compulsory data. Where this data is not available, one solution would be to send a record card for each employee for these to be checked, amended, initialled and returned to us (the agent).
Obviously this would need to be done with the approval of your client/employer. The next step would be to transfer the amendments onto your computer system using your payroll software.
Maintaining client relationships with RTI
It is becoming apparent that with the introduction of RTI the relationship between the member and their clients may become strained and needs to be properly managed.
For example it is important the member is clear with their client that:
- once you have filed the return there can be no more changes to the payrun
- they must provide you with all the data needed for new starters on a timely basis or the new starter may not get paid (in practice this may put the employer in a difficult position as they may have a legal and contractual duty to pay their employees).
One member was on the whole happy about RTI, but felt that it still appears to be falling short on dealing with the coding issues surrounding PAYE. AAT agrees with this issue and we have raised this with HMRC as part of the Agent Engagement Strategy.
Should you pass the costs of introducing RTI onto your clients?
The costs of introducing RTI and the annual running costs may be:
- software costs
- possible hardware costs
- internet costs
- training costs
- additional administrative costs of implementing RTI
- additional administration costs of dealing with HMRC.
It is reasonable for members in practice to pass these costs onto their clients. However, given the current economic times this is unlikely to be well received by your clients. Therefore, members in practice will need to use their professional judgement in deciding how they are going to raise the issue with their clients.
Get help and advice with RTI
If you are looking for training events then:
- try HMRC’s events
- look for a local accountancy company, which may be a software reseller, who may offer free training as part of the package
- check with your existing software provide to see if they provide training.
One member found the Sage webinar helpful and picked up useful tips to pass on to their clients. A list of other software providers that are RTI compliant, and which may also be offering webinars and training events, can be found on the HMRC website.
For information on Real Time Information visit the HMRC website and select the link which states ‘I confirm that I want to view guidance on operating PAYE in real time’. HMRC publications, such as Employer Bulletin and Agent Update, are usually worth reading too.
Michael Steed MAAT on RTI
Watch AAT’s tax expert Michael Steed MAAT in conversation with Accounting Technician magazine editor, Ben Walker, on RTI:
Aleem Islan is AAT's Technical Consultation Manager.