HMRC has described Real Time Information as the biggest reform of business tax reporting in 70 years ahead of its introduction in April.
The tax authority will, this week, send a letter out to all employers outlining what needs to be done.
Under the details of the scheme, each employer in Britain will move to a new way of reporting tax and national insurance deductions from employees’ wages and salaries. HMRC says that the new PAYE system will be ‘quicker, easier and more accurate’.
Lin Homer, chief executive of HMRC, says that employers can find all the information needed on the authority’s website. Small businesses can download free software to aid with the preparation.
RTI will also see the abolition of what HMRC describes as an ‘extensive’ annual tax return. It predicts that savings to business will total £300 million in reduced administration costs.
More on Real Time Information:
Homer adds, ‘PAYE directly affects every employee in the country and that is why it is vital it reflects, on time and accurately, the tax circumstances of the millions of employees who depend on the system to get their tax right.
‘RTI delivers on all fronts. Business costs will be cut by £300 million a year, employees will be taxed more accurately and fraud and error in the tax credit system will be reduced by hundreds of millions of pounds every year.’
HMRC has issued tips to prepare businesses for the introduction of RTI:
- Visit HMRC’s website for further information on how to prepare and payroll software options
- Acquire new or updated software
- Start checking and updating employee information so that it is up to date