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RTI pilot proceeding ‘just as planned,’ HMRC says

It’s full steam ahead on the new Real Time Information PAYE pilot, according to Her Majesty’s Revenue & Customs, indicating that it’s a foregone conclusion that it will go into effect this April for the rest of the UK’s businesses.

The proposed RTI programme, which will drastically alter the way employers report deductions from their workers’ pay  by requiring information to be sent to HMRC every pay period instead of simply once a year, has been drawing ire and criticism from many for the increase of red tape that will soon need to be cut through by every firm in the UK. Despite this, the taxman is committed to the change in order maximise revenues by cutting down on tax avoidance and increasing accuracy in reporting.

PAYE rules and rates aren’t actually changing, which means that harried Brits already scrounging for cash don’t have to worry about increased taxation. No, in this case employers will have to bear the brunt of the financial burden, as the RTI system will require specialised payroll software that is designed to transmit payroll information directly to HMRC whenever an employee is paid – and as this system will be compulsory, businesses have no choice but to upgrade their payroll software if the current software they’re using isn’t compatible.

Around 300 businesses have been working under the new rules on a volunteer basis since this April, and apparently the reports have been good enough to warrant the taxman to push for a full, widespread integration in 2013. The system will start being rolled out in April of next year, with the expectation that the entire country will be on the RTI system by October of 2013 – or face mounting penalties for late payroll reporting.

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