Real Time Information
The Real Time Information (RTI) Pilot continues with strength – new data and validation specifications have been issued for use from October 2012 (still in the pilot), and HMRC have issued the technical specification for the 2013/2014 tax year, containing corrections and options to overcome the initial learnings and difficulties from the Pilot.
There has been a lot of hype however, urging employers to make an assessment of their data, and in some cases advising interrogation of 108 data fields – an exercise that is, in most cases, not necessary for employers. With the start of RTI, the amount of data flow will increase, meaning the scope for error increases.
So the question being asked, is how correct is the data, and what will be the impact on HMRC’s National Insurance and PAYE Service (NPS) system?
Communications on RTI are pushing employers to check and cleanse data, not all the 108 RTI items, and certainly nothing that isn’t done already, but pre-existing data to ensure that accuracy is achieved going forward.
In this article, we offer some tips to providing HMRC with accurate data.
Providing HMRC with accurate data
Providing HMRC with accurate employee information helps ensure that employees pay the right amount of tax and National Insurance Contributions (NICs). It also helps protect their entitlement to certain state benefits. Accurate data will help employers save time as they’ll receive fewer enquiries from HMRC and their employees.
HMRC state that the following key data items are required to be recorded as accurately and as correctly as possible:
- Date of birth
- National Insurance Number
Many systems allow flexibility in the content of data, and all of these data fields required for data capture are already offered by payroll solutions, but accuracy is ultimately dependent on the imformation collected by the employer.
Titles, Names & Initials
HMRC preference is that full forenames are provided, but many employers only provide initials on their payroll operation.
The use of defaults or irrelevant data to HMRC must be avoided. For example, you should not use a name such as “Shift Worker #1” for an employee’s name – use the employees actual names.
Date of Birth
It has been an HMRC quality standard validation requirement since April 2005, to capture and report to HMRC an employee’s Date of Birth.
Some employers have in previous years used some (so called) default Dates of Birth. With the introduction of compulsory end-of-year filing in 2005 and with the onset of RTI, these are no longer acceptable and only genuine employee dates of birth are allowed.
National Insurance Number (NINO)
NINO is a critical piece of information in identifying an individual in the UK. Employers are to only enter an employee’s correct NINO. This should never be made up, or copied from another individual’s NINO.
It is also a requirement of the HMRC quality standard validations that employers report the correct Gender (male or female) that is applicable to an individual.
What data should employers check?
Where employers have a history of obtaining inaccurate information from their employees, the following items are worthy of checking:
- Address Lines
- Date of Birth
Most of the other fields and data will be catered for by your payroll solutions, and require very little confirmation.
RTI will use the employer held records, so if you believe your data collection is not very good, then it is advisable to undertake a checking exercise to assess whether a data cleanse activity is required, prior to undertaking the first Employer Alignment Submission (EAS) or the very first Full Payment Submission to ensure that you will be passing accurate employee information through to HMRC.
We will be contacting all Ceridian customers over the coming months with a service to help you cleanse your data and prepare for the introduction of RTI in April 2013.