Real Time Information (RTI)

Definition

Real Time Information (RTI) is a system implemented by HM Revenue and Customs (HMRC) for the reporting of payroll information by employers in real time. 

What is Real Time Information?

RTI requires employers to report payroll information to HMRC in real time, meaning that they must submit data about employees’ earnings and tax deductions each time they pay their employees, whether it’s weekly, bi-weekly, or monthly. This ensures that HMRC has up-to-date and accurate information about employees’ earnings and tax liabilities.

RTI allows employers to report changes to employees’ employment status, such as starting or leaving a job, changes in working hours, or updates to personal details. This ensures that HMRC has timely information about changes in employment circumstances that may affect tax contributions.

With RTI HMRC can automatically update individuals’ tax records based on the information reported by employers. This helps ensure that individuals’ tax codes and entitlements are accurate and up-to-date, reducing the need for manual intervention and minimising errors in tax calculations.

Employers are required to comply with RTI reporting requirements and submit accurate and timely payroll information to HMRC. Failure to comply with RTI regulations can result in penalties and sanctions imposed by HMRC, including fines for late or incorrect submissions.

Example of Real Time Information

ABC Company implements Real Time Information for its payroll reporting process. Under the RTI system, ABC Company submits payroll information to HMRC in real-time, every time employees are paid.

By using RTI, ABC Company ensures that HMRC receives accurate and up-to-date payroll information, allowing for more efficient tax administration and compliance. Additionally, RTI helps ABC Company avoid penalties associated with late or inaccurate payroll reporting, ultimately streamlining its payroll processes.