In July 2010 HM Revenue & Customs (HMRC) published a discussion paper titled “Improving the Operation of Pay As You Earn (PAYE)”. This focussed on improving the timeliness of the transmission of information to HMRC as a way of reducing costs for both employers and HMRC and for improving customer service to bothe employers and employees.
The paper introduced the concept of “Real Time Information” (RTI) which would be the means by which HMRC would gain information about tax and deductions automatically each time a payroll is run. It is envisaged that if employees are paid by Bacs, for example, the RTI data submission would form a part of the Bacs transmission process.
As a result of the July 2010 discussion process RTI will proceed with a phased introduction starting in 2012.
Read more about Real Time Information.