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Top Tips for HMRC RTI

Published on Wednesday, January 04, 2012

Organisations get ready for HMRC Real Time Information

questionmark.gifHM Revenues & Customs (HMRC) is proposing a complete overhaul of the way employee information is filed, with the introduction of its Real Time Information (RTI) reporting initiative.  Employers and Payroll Managers are amongst those most affected by these changes, but effective planning and preparation will minimise disruption and allow for a smoother transition to the new system.

Focus on Data Quality

Potentially the Achilles' heel of the entire operation, data quality will make or break the success of RTI.  If employers are harnessing incorrect information about their employees then 'matching' payments to RTI, submissions will become erroneous with employees potentially paying the penalty. It is imperative that all data held in a company's payroll system is cleansed, with particular attention paid to:

  • Employee name (spelling & formatting)
  • National Insurance Number
  • Date of birth (if you don't know it, leave it blank, don't use a default setting)
  • Gender
  • Address

Obtain Data for New starters

The implementation of RTI will see changes to the starters and leavers process. Currently, many companies will accept not having full data when they bring a new starter on board, but with RTI this will be unacceptable. If a piece of data is not available, for example, your new employee has not yet been issued with a National Insurance Number, leave it blank. Do not make it up.

Review your Payroll Processes

This is an essential piece of preparation that should be done well in advance of the arrival of RTI. Internal processes will be impacted by RTI as employers and payroll managers move from end of year submissions to weekly or monthly submissions alongside the payroll itself. Now is the time to consider how that will manifest itself within your organisation and ensure you have the resource and capacity to accommodate this change.

Liaise with your Payroll Software Provider

Your payroll solution will need to be upgraded with all the requisite data items and the ability to produce cross references and hashes to accompany both the RTI submission and the payment itself. It is worth liaising with your payroll software provider now to ensure they are tracking according to plan and understand the timescales and expectations for the upgrade. If you are not confident with their plans, it could be worth considering your options as it is the employer who will be mandated to comply with RTI and penalised for inability to jump on board.

Liaise with your Payments Provider

You will need to ensure your payments software can also carry the payroll file, including the RTI cross-reference.  In addition, your payments software needs to be able to accept that revised file. Your payments provider will be able to advise you on its RTI readiness and how that impacts you.

Employers and payroll managers will begin to fully use the Real Time Information (RTI) service from April 2013. A pilot of the service commenced in April 2012, following an announcement by HMRC that there will be a delay in a core component of the RTI initiative. The decision to defer the deployment of the Bacs channel for RTI reporting and the plan to use the Government Gateway or EDI as an interim solution is politically expedient and ensures the pilot can proceed as planned next year.

However, let us not forget that this interim measure is just that, an interim. A long-term, future-proofed and strategic approach will be to submit the RTI file alongside the payments file, down the Bacs channel.

Employers and payroll managers should get on board with Bacs now, make sure they have a good, RTI-compliant Bacs solution and ensure their next move in the preparation for RTI is one that minimises disruption as much as possible.

Are you ready for HMRC Real Time Information (RTI)? ยป