Written by Richard Rowell
Published on April 6, 2011

If you haven't heard of it yet the chances are that you will be affected by it soon. RTI or real time information is HMRC's new system for exchanging live information about your employment details and will interact directly with you payroll providers software.

In theory the RTI system promises many benefits including an end to the current P45's P46's, tax code updates and year end P35's. In a way it is a natural extension to the in-year filing system already in place.

However, it isn't all good news.

First practicalities. Recent HMRC IT initiatives haven't fared so well. The widely reported debacle last year over the incorrect issuing of tax codes highlighted many issues and knocked taxpayer confidence. Under the new proposals changes in tax codes etc would simply be implemented and at this stage we are not sure if there will be any ability to check them. Believe me we have seen some crazy tax codes issued in the past.

As a bureau we also constantly struggle with slow HMRC systems, particularly at pressure points around year end.

Finally, there is also the point that theoretically HMRC will have up to date information about your PAYE/NI liabilities on a real time basis throughout the year too. Something they do not presently hold.

On balance we think the introduction of RTI will be a good move but, with an implementation date 2 years away, there are significant questions and technological hurdles to overcome. We think this timescale is too soon.