Well, simply put, it matters because the government says it matters. So unless you are a) Brave b) A little stupid c) Have no intention of ever paying any of your employees ever again, then feel free not to read on. For those of you who are a little intrigued by what the changes to the PAYE system mean, consider this a lubricant ( yes, this piece has taken on a ‘tone’) to gently ease you in to the super sexy world of RTI. To save this from sounding like the intro to some strange live adult show, let us cease with this digression.
RTI then is the new Real Time Information system being introduced by the UK government to shake up and straighten out the way HR and Payroll Systems as well as HMRC pay us and handle our financial information. If you need some help in your search for a payroll service provider, have a look at Sage, one of many companies that have been working with HMRC to test out the new system before it rolls out en mass later this year.
It’s Away With The Clouds
This is actually a good thing, and no, this isn’t me instigating more escapism, as RTI is a cloud system. The government are joining the tech revolution and taking the business of managing our finances online with centralized cloud technology. It’s the modern way to store as much information in one place as possible – keeping all your eggs in one very secure basket. As the government attempts to streamline the processes required to handle our financial information, it makes sense for them to opt for a system that enables them to do just that.
The genius of cloud systems is that they work around your business needs, and fit the size of your business too- the system grows and upgrades as you do, so bid an unceremonious farewell to hours on the phone speaking to that bloke from IT who is not much help when your system crashes or is running too slow. Working online means that information can be collated and received in a much timelier manner.
Efficiency becomes a doddle
Folks you might as well kick back and relax (if only slightly), as the new system makes getting shit done so much easier.
Going digital means that you can benefit from real time syncing of information between different parties – your office can update information to the system and HMRC will automatically be aware of it. This means all information is constistantly being kept up to date and constantly updating itself too. Going digital is energy efficient too! Kiss goodbye to long hours filling out ironically green coloured paper forms that all look the same and are only differentiated by confusing P-numbers.
We’ve all heard the cries berating bureaucracy, and this system effectively tackles that problem. The Cabinet Office have applauded the new system for its ability to “substantially reduce the cost of communication services across UK Government and enable new, joined-up and shared public services for the benefit of citizens”. NO MORE MIDDLE MEN, can I get an amen for the simple good life?
Accuracy made easy
Errors can prove very costly indeed. For the financial tax year 2010/2011 the tax man demanded back over 3 million pounds in repayments. Ouch. This new system means that there is a synergy of information not only between the HMRC’s office and your own, but also between the HMRC’s records and the financial details of your employees: The new RTI system has been designed in relation to the changes to the Universal Credit System, in order to streamline for the highest possible levels of accuracy to avoid repetitions of the aforementioned catastrophic mistake. Accuracy is also important for data input now more than ever, as simple errors will mean that you will not be able to submit payroll information.
As well as giving accurate data, now businesses will also have the capacity to verify that they have been given accurate information too with the mechanisms in place to check NI numbers. This leads to greater safeguarding against fraud, so happy days all round.
RTI matters not only because it’s the new technological approach of the future which upgrades a dated system that has been in operation for the past 70 years ( yep, ‘splains a lot) but embedded in all the increased benefits are core issues which if they are addressed will help your business to fly: in essence RTI matters because it is based on some of the basic principles of running any company or service- being more efficient, being faster, and keeping things simple.