Real Time Information (RTI) is the most significant change ever made to PAYE. A new and improved way of reporting, RTI is designed to make PAYE submissions more efficient - meaning you'll need to submit information to HMRC in real time, every time you pay employees.
What is Real Time Information?
Real Time Information doesn't change the way you calculate PAYE; it just means you'll need to make more regular submissions. Each time you pay your employees you'll need to submit PAYE information to HMRC, rather than just once a year at Payroll Year End.
Following concerns over the impact of RTI on small businesses, rules of reporting were temporarily relaxed but from October 2014 those relaxed rules will be lifted and small businesses will need to start reporting each time they pay their employees - not just on a monthly basis.
It’s important that small business act now to make sure they’re ready for reporting RTI fully and accurately to avoid the risk of a fine and any penalties.
You’ll still need to process PAYE in the same way but you’ll need to submit the payroll information to HMRC on or before the day you pay each of your employees.
You'll continue to...
- Provide P60's
- Submit P9D, P11D & P11D(b) forms
You'll no longer...
- Submit P14 forms
- Submit P35 forms
- Submit P38A returns for casual employees
- Submit P45s to HMRC
How do I submit information to HMRC?
You’ll need to do this using a Full Payment Submission (FPS). If you have Payroll Software it will generate the required reports and submit your payroll information online to HMRC.
If you don’t need to pay any employees in a particular tax month, you’ll have no FPS to send to HMRC. You must notify them by sending an Employer Payment Summary (EPS) by the 19th of the following tax month. This will make sure HMRC don't wrongly send a penalty notice because they were expecting an FPS from you.
What happens if I don't submit to HMRC?
HMRC will penalise any employer not submitting a Full Payment Submission or Employer Payment Summary on time. They’ll also penalise you if your payments are late.
To help steer clear of fines and penalties take a look at our useful blog posts:
However you manage your payroll, make sure you're ready!
If you're outsourcing your payroll be mindful that submitting RTI is still your responsibility. Ask your provider how they're complying with RTI and if it means any changes for your business.
Ask your payroll software provider if they're RTI-ready. It's essential you make sure you're using software that's legally compliant with the support you need to submit PAYE in real time.
HMRC's free online submissions portal won't be RTI-ready so if you're using HMRC's desktop tool, we've made it easy for you to switch to Sage One and transfer data in just 5 minutes.