Prepare For Fewer Mistakes With Your Tax With RTI

Prepare For Fewer Mistakes With Your Tax With RTI

November 6th 2012 2:21 pm

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6 Million Employees Set To Have Their PAYE Records Submitted Electronically In New Real Time HMRC Scheme If you are an emplo ...

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6 Million Employees Set To Have Their PAYE Records Submitted Electronically In New Real Time HMRC Scheme

If you are an employee and paid via the PAYE (Pay As You Earn) scheme, you will know that HMRC only gains full knowledge of how much you were paid and taxed at the end of the tax year when your employer submits their annual PAYE return - this process, normally sufficient, breaks down when you have more than one employment during the tax year or multiple income sources. Your tax code can be incorrect, and this can result in either too much or too little tax being taken. HMRC have responded by setting in progress a new pilot scheme this April (2012) which, rather than the annual reconciliation method, requires employers to submit an electronic return each time an employee is paid as part of their regular payroll process. HMRC will then be as up to date on your income, deductions and tax contributions on a monthly basis - reducing errors and making sure you are paying the correct amount of tax.

250,000 New Employers Join Scheme

It was announced today that an additional 250,000 employers will join the scheme over the next 6 months and it will become compulsory for every employer after that. A reduction of admin costs will result in cost savings of £300 million per year and importantly for HMRC will also integrate tightly with the new Universal Credit, benefits system. The Universal Credit brings together the current income support, Job Seekers Allowances, Tax Credits, Housing and other Benefits under one umbrella. You can read more about the Real Time Information scheme here.

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