HMRC’s system for reporting PAYE

RTI for PAYE is HMRC’s system for reporting PAYE. Here’s what it means for you.

Pay As You Earn (PAYE) is HMRC’s system for collecting Income Tax and National Insurance Contributions from employment. RTI for PAYE was introduced in April 20213 with the main objective of enabling more accurate PAYE reporting. RTI is an abbreviation for ‘Real Time Information’, which means that HMRC now receives information on employers’ PAYE per pay period rather than all at once at the end of the tax year.

By receiving PAYE information in real-time, HMRC has the opportunity to pick up on and amend any errors as they occur, rather than trying to reconcile inconsistencies or errors at the end of the tax year. The more accurate the information, the better the chance that employees will be on the correct tax code, and the less likely you will be lumped with an unexpected tax bill.

Contractors and freelancers using Churchill Knight Umbrella

Once you register with Churchill Knight Umbrella, we will become your employer and pay your wages through PAYE. As we process all of your payroll for you, there is nothing you need to do. The most important thing is to ensure you have updated us with all your details so the information we submit matches the information held on you by HMRC.

Once we have received the funds from your recruitment agency or end client on the day you are due to be paid, we will deduct the following from your gross salary:

  • Income tax
  • Employee national insurance contributions
  • Employee workplace pension contributions (if you do not opt-out)
  • Student loan repayments (if applicable)
  • Other deductions you have agreed to or are legally required to pay

The tax deductions will be sent to HMRC on your behalf, and your take-home pay (or net pay) after these deductions will be paid directly into your bank account. Please visit the government’s website for more information about how you will be paid when working via an umbrella company.

For further information on RTI for PAYE, please visit the government’s website.

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