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HMRC internal manual

PAYE Manual

Background: real time information (RTI): introduction

Real Time Information (RTI) fundamentally changes the way employers and pension providers send Pay As You Earn (PAYE), National Insurance Contributions (NICs) and Statutory Payments information to HMRC.

RTI improves the operation of PAYE - the process of accounting for PAYE income tax, Class 1 NICs, Statutory Payments made, recovery of Statutory Payments and NICs compensation on Statutory Payments. It makes the PAYE system easier for employers and HMRC to operate. It also supports the introduction of Universal Credit (UC).

UC is an integrated working-age credit that will provide a basic allowance with additional elements for children, disability, housing and caring. It will support people both in and out of work, replacing Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance. UC will be phased in from 2013-2014 and will be administered by the Department of Work and Pensions (DWP).

The fundamentals of PAYE, including NICs are unchanged, for example, there is no change to the use of codes, or the employers role in deducting tax and NICs and paying liabilities to HMRC. What RTI does change is how and when employers and pension providers report information to HMRC.

Previously employers and pension providers’ sent information about tax, NICs and other payroll deductions to HMRC after the end of each tax year.

However, under RTI, employers and pension providers send HMRC data online in real time about tax, NICs and other deductions when or before each salary / earnings or pension payment is made.


  • Makes the PAYE process simpler and less burdensome for employers and HMRC, for example, by removing the need for the end of year return (P35 and P14) and simplifying the employee starting and leaving processes
  • Makes PAYE more accurate for individuals, over time reducing the number of bills and repayments sent after the end of the tax year

Enterprise Tax Management Platform (ETMP)

The new accounting package on ETMP went live on the 15 October 2012.

For further information see PAYE48000 onwards.