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Getting ready for RTI - A FreeAgent guide for small businesses and freelancers

Getting ready for RTI - A FreeAgent guide for small businesses and freelancers

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Published by HenryRichards
In April the way in which we report wages and deductions to the HMRC in the UK will be changing. Most businesses will have to submit payroll information everytime they pay an employee. To find out more about how these changes may affect your business, check out this step-by-step guide from FreeAgent.
In April the way in which we report wages and deductions to the HMRC in the UK will be changing. Most businesses will have to submit payroll information everytime they pay an employee. To find out more about how these changes may affect your business, check out this step-by-step guide from FreeAgent.

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Categories:Types, Business/Law
Published by: HenryRichards on Mar 20, 2013
Copyright:Attribution Non-commercial

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09/17/2013

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  R   T  I
Getting ready for RTI
A
 
FreeAgent
 
guide for small businesses and freelancersMarch 2013
 
Try it now for free atfreeagent.com
Getting ready for RTI:
2
What is RTI?
RTI stands for Real Time Information, and it’s the new way to report wages, salaries,PAYE and National Insurance to H.M. Revenue & Customs (HMRC). The big changeis that, from 6th April, you will need to report this information to HMRC in
real time
.There are
no changes
to the amount of PAYE or National Insurance that youhave to deduct from your payroll, nor to the dates by which you have to paythem over to HMRC. The only thing that is changing is the reporting process.
 When is RTI beingintroduced?
You’ll need to start ling
Real Time Informationfrom 6th April 2013.
 Why is RTI beingintroduced?
RTI is being introduced because the Government needs up-to-date informationabout people’s pay in order to calculate the Universal Credit – the basic
social security benet – correctly. Universal Credit comes in later in 2013.
GLOSSARY
RTI Real Time InformationPAYE Pay As You EarnFPS Full Payment SubmissionEPS Employer Payment SummaryHMRC H.M. Revenue & Customs
 
Try it now for free atfreeagent.com
Getting ready for RTI:
3
Does RTI apply to me?
RTI applies to anyone who is registered for PAYE (or needs to be). This means:
Yes
, if you employ sta (see below for a few exceptions)
Yes
, if you do your work through a limited company
(assuming you pay yourself a salary or reimburse expenses)
No
, if you are a sole trader or a partnership that does not employ sta.
If you are a director of a limited company,
remember that even if your company
doesn’t pay you a salary, you still need to operate RTI if you receive any expensepayments. Because you must report these expenses on form P11D each
year, you need to have a PAYE scheme in place and thus fall under RTI.
 
I only employ casual sta or sta without PAYE
deductions. Does RTI still apply to me?
Previously you could keep low-paid employees o the PAYE system,
and only use PAYE for those that required it. Under RTI, if you have
any
 
sta for whom RTI applies, then you have to apply it for
all sta 
.
RTI doesn’t apply if all of your sta:
 
y
do not receive expense payments.
 
y
do not receive benets that are not paid in cash (forexample, health insurance or company cars).
 
y
are paid below the Lower Earnings Limit for National Insurance.This will be £109.00 a week for 2013/14, or £472.33 a month. 
y
do not need PAYE deducting. You must deduct PAYE if you
have a tax code for your employee, for example:
 
if you are using a tax code when RTI comes in.
 if your employee gives you a P45. 
if your employee gives you a P46 with box C
ticked in the bottom left-hand corner.
Otherwise, RTI does still apply.
These exceptions might apply, for example, to casual sta, or
students, or people who only do a couple of hours a week.Don’t forget though, if you are the director of a limitedcompany and your company needs to operate RTI for you, yourcompany will also need to operate RTI for
all
your sta.
Nt fr limitd cmpany dirctrs

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