real time information

What is RTI (Real Time Information)?

04/01/2023Payroll & PAYE , Pension , Personal Tax

When you are an employer of large or small businesses in the UK, there is a mandatory thing to do for you is to inform HMRC about the details of your employees. For this procedure to be successful for beginners, a basic understanding of real-time information is important to learn. In a nutshell, real-time information is a method of reporting the payroll to HMRC in real-time. The method of real-time information is done through an electronic medium by the employers before they make the payments of wages and salaries to their employees. It has been a mandatory part of the business for employers to inform HMRC about the wages details every month. It has become a must part since 2013. Moreover, if the employer makes any mistakes in the submission or the reporting is not done on time, HMRC will charge a hefty amount of fines and penalties. Normally employers will likely require real-time information-enabled software and a good connection to the internet to complete the procedure. This software and connection are used to do the online PAYE filing. There is free software by HMRC that can be used by employers that have less employee count. However, there is commercial software available that is easy for employers to use if they have a large number of employees. We have got you covered with basic information about real-time information. This involves the discussion of what is real-time information, how to ensure your business is a real-time complaint, and what are the penalties in case you fail to file.   Reach out to our smart and clever-minded guys to get your real-time information queries answered quickly. We will help to decide how to deal with your business problems in the UK.   What is Real-Time Information (RTI)? The main purpose of the real-time information is to report the salaries, wages, national insurance, and PAYE to HMRC. Before the business period of 2013, there used to be a form P35 for the purpose of sending details of employees, how much they are getting paid, and how much is being sent to HMRC in form of national insurance and tax. However, after 2013, the methodology changed and now the employers are required to send these details to HMRC before the wages are transferred every month. Moreover, this is also explained by the name that the employers are required to share the information in the actual meaning of real-time before they transfer the wages. Waiting for the tax year end is not practical for the employers as well as HMRC.   How to Ensure that Your Business is RTI Compliant? Do you want to outsource your payroll to specific service providers or accountants? You must ensure before hiring one, how are they going to make your business real-time information compliant? Some of the businesses use the software payroll already. Get into close details of how your accountant or service provider is getting benefits of using the software for this purpose. On the other hand, some businesses are more inclined towards using desktop software. In this scenario, you normally get a software update every now and then. You will have to install the upgraded version and its benefits.  Moreover, some businesses use cloud-based software, and the service provider will be seamless during this method because of the updated technology.   What is the Relation between the Quality of Payroll and Real-Time Information (RTI)? The main purpose of the payroll data is to ensure that the data you provide during the audits are upgraded and accurate as well. Here comes the helping role of real-time information as it helps to record the data and make records of every salary that you transfer to your employees. This information is further submitted to HMRC also. These records must match for a stand accuracy level. In case the records are not being matched, you are being to help to identify the errors and rectify them on time. Before HMRC finds them out and it becomes trouble for you. You might even end up paying a hefty amount in form of fines and penalties.   Penalties and Fines of HMRC in Case of Submission Failure In case a business fails to submit the report on time, there is no escape from the penalties of HMRC. Whether you made errors while doing the process of filing or you failed to do the submission before you paid wages and salaries to your employees in a tax month, be ready to pay extra in such a month. Many of you must be wondering about the number of penalties. Well, this depends on the size of your business that will decide your penalty. The number of employees hired by an employer will also matter in this regard. £100 for the employee count between 1  to 9. £200 for the employee count between 10  to 49. £300 for the employee count between 50  to 249. £400 for an employee count of 250 or more than this.   The Bottom Line Now that you have gathered a fair amount of information about the use of real-time information, we can bring the discussion towards wrapping up. Real-time information is important for all businesses to inform HMRC before the wages and salaries are transferred to the employees. However, the conditions vary for every business type and size. In case you fail to do the procedure on time, you will have to deal with a hefty amount of fines and penalties charged by HMRC. This can put you in serious circumstances. We hope these few minutes of reading will help you to develop a better understanding about what are the benefits of using real-time information for your small business needs.   Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly for small businesses’ real-time information problems. Call us or email us today.   Disclaimer: The general information provided in this blog about the use of real-time information includes …

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