Real Time Information (RTI) is being introduced by HM Revenue & Customs (HMRC) from April 2013. Under RTI employers will be legally required to submit electronic returns of payroll data to HMRC in each pay period. The RTI submission will contain information about employees paid in the period and their earnings.
All employees should be included in the RTI submission; even employing one person for one day will be subject to the RTI requirements. In effect all ‘casual’ labour will be included on the payroll and existing rules regarding casual labour will be superseded. Students, harvest workers, beaters and other season part-time staff are included – there is no exemption for smaller employers. The new RTI rules will apply across the board.
If there is no need for an employer to be registered with HMRC for Paye purposes, i.e. everyone on the payroll is paid below the Lower Earnings Limit (LEL)* for National Insurance purposes and the employer is aware that no other employment is held by the employee, then this would be the only situation where an RTI submission is not required. Employees in this position will still need to advise the Department of Work and Pension of payments received. If one employee is paid above the LEL then this would pull all other wage payments into RTI.
There is mandatory data that should be obtained for each employee and included in the RTI submission. The responsibility is with the employer to know the:
- Full formal names of employees
- Dates of birth
- National Insurance Number
Where payment is made to an employee outwith the normal payroll pay date, for example the payment to a Beater at the end of a shoot, the employer is required to submit the payment information to HMRC either on the next RTI submission or within seven days following the date of payment, whichever is sooner.
Clearly the onus is on employers to ensure the requirements of the new legislation are met. For their own protection employers will have to insist on compliance with the RTI requirements. Penalties have recently been announced by HMRC and information on this can be found on our website. Employers should review their payroll process and systems and ensure they will be in a position to deal with RTI submissions from April 2013.
If you have any queries on the PAYE treatment of casual labour and RTI, please contact our Payroll Manager Neil Cameron by email to email@example.com or phone 0131 558 5800.
* The Lower Earnings Limit (LEL) is £107 per week, £464 per month or £5,564 per year.