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RUE4RTI? We can decipher the puzzle for you

12 March 2013

HMRC will shortly demand instant payroll reporting from employers.  From April 2013 most small and medium sized businesses are required to send details of the amounts they pay their employees on or before the date the payments are made.  This is a radical change to the way in which HMRC gathers information from employers.  Under the present system this sort of information is only required at the end of the tax year, when the P35 and associated returns are submitted.

HMRC call the new process Real Time Information and employers will need to get their house in order as the information transfer has to be done online in the majority of cases.  HMRC advise businesses to take action on the following key steps before April 2013: 

  1. Visit HMRC’s website for comprehensive information about RTI, including how to prepare, payroll software options and hints and tips to help avoid common pitfalls.
  2. Acquire new or updated payroll software – employers will need to talk to their payroll software provider or their payroll service-provider (if they have one) about this.
  3. Start checking and updating employee information. It’s vital that the information employers have about their employees is accurate and up to date.

However, these general actions hide a multitude of tasks that must be completed.

From 6 April 2013 there are various payroll summaries you will need to submit to HMRC every time you make a payment to employees, make adjustments to previous returns or adjust employees’ details (or even when you haven’t paid any employees).  These  are:

  • Full Payment Submission (FPS) - sent each and every time you pay your employees.
  • Employer Payment Summary (EPS) - to report a reduction in the amount you pay to HMRC or if you haven't paid any employees in a pay period.
  • Employer Alignment Submission (EAS) - to align your employee records with HMRC’s records before you submit other information. An EAS is only required for employers with a large PAYE scheme (over 250 employees) or with a payroll administered by two or more payroll systems.
  • Earlier Year Update (EYU) - to correct, after 19 April, any of the year-to-date totals submitted in your final FPS for the previous tax year.
  • National Insurance Number Verification Request - to verify or obtain a National Insurance number for new employees

If you take advantage of our Payroll Service to process your payments to employees, these changes and all of the necessary reports and submissions will be handled for you.  Our payroll software is fully compliant with RTI.

Many businesses are taking the opportunity to outsource payroll processing at this time.  If you are considering doing the same, we will be pleased to explain the benefits and the costs involved if you contact us at or speak to your usual contact.

And don’t forget the penalties.  For 2012-13 and 2013-14 penalties will still be charged if the tax year data is not filed by 19 May following the end of the tax year.  For these two years only there will be no penalties if in-year Full Payment Submissions are submitted late.  However from 2014-15 we expect penalties to be applied for failure to comply fully with the new rules.  We have been warned.

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