New Real Time Information System – What U.K. Employers Should Know
U.K.’s new Real Time Information System (RTI) that changes how employee data is processed and streamlines UK Pay As You Earn (PAYE) tax system will be compulsory for all employers from October 2013. Business in the U.K. and those managing international employees in the U.K. should begin preparing at the earliest as new payroll software systems and compliance procedures may need to be implemented.
With UK’s RTI, employee details that are usually submitted to the HMRC (HM Revenue and Customs) at the end of a tax year e.g. details like the date of birth, address and national insurance number, must be provided every time an employee gets paid.
From regular payroll – monthly or weekly – to whenever bonus, overtime, and commissions are paid or whenever an option is exercised or shares vest, returns must be filed on or before the actual date of payment.
The Highlights:
- RTI comes into effect fully from October 6, 2013.
- Currently, the HMRC is running a pilot with 10 employers but the HMRC has power to add any employer to the pilot at any time i.e. employers must be ready now.
- The HMRC states 250,000 employers are expected to implement RTI between November 2012 and March 2013.
- For employers with workforce in the UK, new software may be needed to cope with the multiple return requirements.
- Clear compliance procedures and communication channels must be set to ensure UK payroll department receive the information timely.
- Processes must be set to ensure that your UK employee database is clean and ready for RTI.
Partnering With an Expert
Partnering with experts can be a wise move as they are abreast with all the complexities of doing business abroad. When doing business overseas, it is prudent to employ the services of a professional who will be up to date on the latest rules and changes in regulations. You can get immense help whether it’s surviving an audit, capitalizing on business deductions, or finding tax-friendly ways to run your business, or help reduce your tax obligations. With a trusted business consultant, you can get the necessary assistance in all the areas of your business like taxation, regulatory filings, global transfer pricing, tax for expats, etc.
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