Since October 2013 Real Time Information (RTI) filing of payroll has been mandatory for all employers. This change is one of the more significant made by HM Revenue and Customs (HMRC) since before payroll information was filed only once per year using an end of year employers summary (P35).
HMRC use RTI to help calculate any changes needed to benefits claimed that are tied to your income throughout the year. It also helps notice any discrepancies such as having the wrong tax code so you don’t have a large amount of overpaid or underpaid tax at the end of the year.
This does mean more work for the employer however, who is required to file a Full Payment Submission (FPS) on every pay date whether it is weekly, fortnightly or monthly. There are no penalties in place yet, but failure to comply would result in HMRC pursuing amounts they think would be due even if no employees were paid in a month. There will however be penalties for late filing in place from the 6th October 2014.
There are also no separate submissions for hiring new employees or when an employee leaves. You just enter their details with a start or leaving date and they get updated with HMRC on the next FPS.
In addition to FPS there are Employer Payment Summaries (EPS) which keep track of the employer’s side of payroll. This will mainly be statutory payments such as sick pay or maternity pay. You will also have to file an EPS instead of a FPS when you do not pay any employees for a pay period. Unlike FPS submissions, EPS submissions are made monthly and are not affected by the frequency you pay your employees.
HMRC do have a simple system you can use for filing your submissions or you can use a payroll software that has RTI filing capabilities, but make sure you understand the software you are using so no mistakes are made; correcting previously filed submissions could result in penalties.
We offer payroll services that include RTI filing so we can handle the regular task of filing your submissions every week or every month. If you require any advice or assistance with the above, please do not hesitate to contact us.