Real time PAYE how will it work?

In less than one month the biggest change to PAYE for 70 years is due to happen. 

HM Revenue & Customs are urging employers to ensure that they are prepared to switch over to a real-time reporting.
The scheme, which comes in from 5th April, will see PAYE reported on or before the date payment is made, while changes to a person's circumstances will be made straight away rather than at the end of the financial year. It is hoped that the new way of reporting will be is quicker, easier and more accurate. HMRC is holding a week long Twitter Q&A (11 March – 15 March) to give employers the opportunity to ask RTI related questions. To take part or ask a question, follow @HMRCgovuk on Twitter and use hashtag #RTIqa

Real-time reporting has been piloted since, with more than four million individuals now reporting their pay through the scheme.
There have been ongoing concerns over how some businesses might implement the system, with ICAEW representatives in November informing MPs the requirement to report pay "on or before" the date payment is made is "at best, unrealistic and at worst, impossible", adding "the proposed rules do not take account of the real world".


Richard Burchell, owner of Burchell & Associates in South Croydon, a chiropodist with five PAYE employees already using the new RTI system, said: "We're part of the pilot and we've been using it since June last year [June 2012]. We've had absolutely no trouble at all, but it's important to have good software and support for that software.

HMRC's director-general of personal tax Ruth Owen said: "Employers can find all the information they need about the new system on HMRC's website and small businesses can download free software to help them get ready. So whatever the size of your business, wherever you are based, whatever you do - if you employ people, it's time to get ready."

Although HMRC's modern approach of using twitter to answer questions regarding RTI is encouraging, how many small businesses are actually ready for this change? Many small businesses are strugling in the tough economic market place and small business owners simply have not had time to find out how this change will affect them. Before RTI comes into force all businesses need to ensure that all the Employee information they have is up to date.