United Kingdom: Parliamentary Group Recommends Delaying Introduction of RTI
The All-Party Parliamentary Taxation Group (APPTG), on 12 July 2012, issued a report entitled “PAYE at the Crossroads”, ahead of the introduction in the U.K. of Real Time Information (RTI). PAYE (Pay As You Earn) is the name given to U.K. withholding. In its report, the APPTG expresses caution with respect to rushing to meet the timetable for full RTI implementation and notes that the needs of business to make adjustments and put in place processes and systems to be able to properly comply with RTI should be underscoring the tax authority’s plan and not the policy deadline.
The APPTG report “PAYE at the Crossroads” recommends:
… that business needs should be prioritised over the policy deadline for Universal Credit in RTI’s migration timetable. We note that the majority of tax credits will not be migrated into Universal Credit until mid-2015 and should HMRC delay the migration of RTI up until this point, the effect on Universal Credit will not be substantial, due to the relatively low number of claimants, all of whom will be able to self report.
As we have reported in previous Flash International Executive Alerts, RTI will require all employers and pension providers to inform Her Majesty’s Revenue & Customs (HMRC) about earnings, income tax, national insurance contributions (U.K. social security), expenses, and other deductions “on or before” the payments are made to the employee. Currently HMRC is running a pilot of RTI with the intention of having all employers using RTI by October 2013.
At this stage, the chance of a delay to the introduction RTI reporting for PAYE is unlikely in our view, despite the APPTG recommending postponing it to 2015. It is advisable that employers continue making plans and necessary adjustments in light of current timetables.