Payroll Real Time Information (RTI)

Navigating Real Time Information (RTI) can be complex and demanding for employers. Below is a summary of the key requirements and procedures related to RTI submissions to HMRC. If you are in the Nottingham area, AHACCOUNTANTS can assist you in setting up and managing your payroll, or we can handle it entirely for you.

1. Introduction to RTI

Under RTI, employers (or their agents) are required to make regular payroll submissions for each pay period throughout the year. These submissions must detail the payments and deductions made from employees’ paychecks. There are two primary returns that employers need to submit:

Full Payment Submission (FPS)

• The FPS must be submitted to HMRC on or before the payday for employees.
• It includes detailed information about employee pay and the deductions made.

Employer Payment Summary (EPS)

Employers may also need to submit an EPS each month in specific situations, including:

• No employees were paid in the tax month.
• The employer has received advance funding for statutory payments.
• Statutory payments are recoverable (e.g., Statutory Maternity Pay) along with National Insurance Compensation payments.
• Companies with CIS deductions that can be offset.

The EPS must reach HMRC by the 19th of the month to offset against the previous month’s payment.

2. Payments to HMRC

Under RTI, HMRC is already informed about the amount due on a monthly or quarterly basis through the FPS and EPS. Employers are expected to make PAYE and NIC deductions less any recoverable payments.

3. Year-End Procedures

At the end of the tax year, a final FPS or EPS must be submitted to inform HMRC that all payments and deductions have been accounted for.

4. Key Considerations

• Wages Reporting: Wages should be paid regularly, and details must be reported to HMRC promptly. It is not permissible to report wages at the year-end as if they were paid throughout the year.
• Impractical Reporting Scenarios: HMRC acknowledges that certain payments made on the same day may not be feasible to report in real time. Under specific circumstances, an additional seven days may be allowed for reporting.

For further guidance on exceptions, HMRC provides specific resources that can assist in understanding when it is permissible to delay reporting.

5. Penalties for Non-Compliance

Employers must adhere to RTI filing and payment obligations to avoid penalties:

• Late Filing Penalties: These apply per PAYE scheme and are based on the number of employees:

• • 1-9 employees: £100
  • 10-49 employees: £200
  • 50-249 employees: £300
  • 250 or more employees: £400

Only one late filing penalty is applied each month, regardless of the number of late submissions. There is one unpenalised default each year; subsequent defaults incur penalties.

• Interest and Late Payment Penalties: HMRC charges daily interest on unpaid amounts from the due date until payment is received. Employers may face penalties ranging from 1% to 4% of late payments. The first instance of late payment will not attract a penalty.

6. Need Assistance?

If you have questions or require further assistance with payroll procedures, please feel free to contact us at AHACCOUNTANTS. We are here to help ensure your compliance with all payroll regulations and to streamline your payroll process.