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Real Time Information: Why Accuracy Matters With PAYE

Monday, September 02, 2013  Syed K. Ali Bukhari  No comments

The introduction of Real Time Information (RTI) for PAYE is being billed as a positive step for all — making it easier for HMRC and employers to operate their PAYE systems. How difficult the transition will be remains to be seen but it is a significant change that every UK business needs to understand and prepare for.
Under the current system — which has remained pretty much unchanged since 1944 — employers are only required to send information about their employees' PAYE and NIC deductions at the end of the tax year. From 2013, they’ll have to do this every month — when they pay their staff. This migration process will take place between April and October 2013.

But businesses need to prepare for the change now.

Is your data accurate?

An important step, according to payroll software specialist Sage, is to make sure your records are 100% accurate. Sage provides nearly half a million employers in the UK with payroll solutions and it has been working closely with HMRC since RTI was conceived.

The wrong data about your staff, it warns, can cause inaccurate tax calculations or HMRC compliance checks.

The vast majority (80%) of data problems, according to HMRC, are concerned with inaccurate information about staff — names, dates of birth and NI numbers.

Its records show that 824 employees had the surname “unknown”, for example. 507 employees are called “A N Other” and over 2,000 have an NI number of AB123456. In addition, some 40 employees on payroll records purported to be over 200 years old!

Recording employee information for RTI

Sage has come up with a useful list of dos and don’ts to help businesses prepare:

DO
  • Enter the employee’s full forename and surname
  • Enter a double-barrelled surname in full
  • Only enter an employee’s correct National Insurance number
  • Enter the correct date of birth in the format DD/MM/YYYY
DON’T
  • Use “known as” names such as Bob instead of Robert or Sam instead of Samuel
  • Enter an initial in either the forename or surname boxes
  • Make up an NI number
  • Enter a default date of birth such as 01/01/1901
There’s more advice on data quality on the HMRC website.

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