rti position statement ebs may

7/27/2019 RTI Position Statement EBS May

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EBS, Payroll UKPosition Statement:

Real Time Information

New Reporting Requirements for PAYEAn Oracle Position StatementMay 2011


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EBS UK Payroll Position Statement:

May 2011

Changes to UK PAYE Reporting for Real Time Information

Target Audience:

EBS customers using UK Payroll

Executive Summary:

This is an overview of the Real Time Information changes that will be introduced by

HMRC from April 2013 for all UK Employers and the current position from Oracle on the

delivery of the required product enhancements.

Real Time Information

HMRC (Her Majestys Revenue & Customs), the tax authority for the UK, is planning to

change the way Employers report Employees Tax, National Insurance and Pay

information. The changes will be mandatory from April 2013 and a pilot scheme will

start in April 2012.

Currently employers calculate and make TAX, NI and other deductions on behalf of

HMRC each payday. In the following month employers pay these deductions over to

HMRC. At the end of the tax year the employers make an annual return to HMRC

providing details about the deductions they have made and HMRC reconcile this to the

payments already received. Employers also inform HMRC about employment changes

as these occur.

PAYE has worked well since its introduction in 1944 but times have changed. There is

greater mobility in the workplace now and working patterns are more complex. HMRC

have streamlined their systems and now have a single database that is capable of

providing an Employees complete history of pay and deductions across all

employments.

In brief, there are 2 main difficulties with the existing PAYE system:

Employee information is not accurate enough throughout the year, which resultsin millions of Tax code adjustments and recalculations.

Employers can delay payment of the full amount owed to HMRC until the monthafter the tax year-end, when their annual return is due.

Real Time Information (RTI).

RTI will collect information about tax and other deductions automatically each time

employers run their payroll. This could be monthly, weekly or fortnightly. The

information will be submitted automatically to HMRC at the same time as the

employees are paid.


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RTI will get information on those joining and leaving employment to HMRC more

quickly. For example, RTI will enable the date of leaving to be submitted before the final

earnings information. A more accurate HRC database should reduce queries and the

need for recalculations of Employees tax.

HMRC will also receive the full amount payment due from the Employer each pay

period.

RTI will mean that the following procedures will be simplified or discontinued:

Issuing a P45 to all employees who leave employment Notifying HMRC of those employees who join Determining a tax code by requiring new employees to complete a P45 Submitting end of year P14, P35 and P38A returns to HMRC.

Submission of RTIWhere employers pay their employees via Bacs

1, the RTI data will form part of the Bacs

submission. The Data will be submitted at the same time as the Employees salary

payment details.

A common standard will be used for the transmission of RTI data at all stages of the

payments infrastructure from payroll software, through banking interfaces and Bacs

submission software to the Bacs system itself;

HMRC will bear the costs of extracting the RTI information from Bacs.

If an Employer does not use Bacs they will be able to submit RTI through the

Government Gateway (Internet filing).

EDI will be available initially for transmissions to HMRC, but will be replaced by BACS

sometime after April 2013.

Timetable of changes

April 2012 to October 2012: HMRC Test system with volunteer PAYE schemes(large, medium and small employers). Employers can join the pilot scheme ifthey have the support of their software supplier.

October 2012 to January 2013: Adjust the system to reflect lessons from thetesting to migrate a further group of volunteers

From April 2013: Mandatory for all employers to start using RTITimetable subject to change by HMRC


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Oracle Development Timeline

Oracle has participated in the Consultation process, responding to HMRC in March 2011

with a number of suggestions and queries.

Oracle has discussed the timetable for RTI with HMRC and indicated that we will be part

of the pilot process, if customers wish to participate.

HMRC will be publishing the Technical Specification in early May 2011.

Oracle will analyze the Specification and discuss any issues arising with HMRC towards

the end of May.

Once the specification has been discussed Oracle will be in a position to announce a

timeline for the development, testing and delivery of the changes required for our

customers to be compliant for RTI reporting by April 2013.

1Bacs the system that makes direct credit and debit paymentsthe vast majority of

salaries, wages and pensions are paid this way.

Oracle contact: Liz Wilson, Email:[email protected]

Phone: 01189 240941
mailto:[email protected]:[email protected]:[email protected]:[email protected]

rti position statement ebs may

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