![]() ![]() Instead of being required to submit an annual return by May 19th: RTI will provide HMRC with more up-to-date and better-quality PAYE information, over time helping to improve the service to individuals by making PAYE more accurate."Īlthough the actual calculation of tax remains the same, under RTI the frequency of reporting is increasing. But the numbers of those with volatile incomes has increased, and it's now more common to have more than one job or pension and to change employer more frequently. Jan Marszewski, spokesperson for HMRC, says: "PAYE remains efficient as it costs less than a penny in the pound to collect and means that millions of taxpayers don't have to fill in tax returns. The DWP requires the information that RTI will supply about individuals' incomes to ensure they are given the correct benefit entitlements. The move also supports the introduction of Universal Credit by the Department for Work and Pensions (DWP) in October 2013, which is aiming to help break the cycle of benefits dependency and 'make work pay'. HMRC reports RTI will reduce administrative burdens on businesses by £300 million a year from 2014/2015, although it concedes they may face some additional transition costs, and it expects over- and underpayments of tax will also be reduced by around £300 million a year. By moving to an arrangement under which payment information is submitted at the time payment is made, things should prove easier for all parties concerned. Under the current PAYE system, HM Revenue & Customs (HMRC) cannot be sure people have paid the right amount of tax until after the year end, meaning a significant number are left with overpayments or bills. Businesses with fewer than 5,000 employees not yet in the pilot scheme must be compliant with RTI by April 2013, and businesses of all sizes by October 2013. And any business that hasn't started making the change is now sitting in the Last Chance Saloon. ![]() ![]() But this April, the switch to Real Time Information (RTI) reporting represents the most significant change to the PAYE system since it was introduced almost 70 years ago. So, in 1944, Pay As You Earn (PAYE) was born. With the war leading to growing numbers of people paying tax, a more efficient collection system was needed. It might best be known as the penultimate year of World War II, and all the horrors that went with it, but 1944 has another, less bloody, claim to fame. ![]()
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