Payroll RTI 

What is RTI? 

RTI (Real Time Information) is a government programme introduced in 2013 to improve the way in which employers submit Pay As You Earn (PAYE) information about their employees to HM Revenue & Customs (HMRC). Under RTI employers are required to submit information every time they pay their employees rather than annually. 

The system is designed to provide ‘greater stability and reduced risk of over or underpayment of tax for employees, simplification for employers at the end of year (no more need for an End of Year return) and for dealing with leavers and joiners, and reduced scope for error and fraud.’ (HM Revenue and Customs Research report 369). 

Accuracy of Employee Data 

When taking on a new employee it is essential to ensure their data is accurate and current.  Incorrect data can trigger duplicate accounts. 

Your records should match those held by HMRC, so every time you pay an employee the correct tax calculations are made.  Seasonal and temporary employees require the same process (if they don’t have a P45 they will be required to complete a ‘Starter Checklist’.  

Full Payment Submission 

Under Real Time Information (RTI) legislation, you must send employee details, pay and reductions information to HMRC on or before the date the employee is paid. This is submitted on a FPS (full payment submission) document using Payroll. The FPS contains: 

  • Starter and leaver information 

  • Employee information (name, address, NI number and tax code) 

  • Employee payment and deduction information 

  • Tax, NI and student loan contributions 

 

HMRC uses the FPS submission to calculate PAYE and National Insurance Contribution (NIC) liability for each tax month. 

Employer Payment Summary 

Employer Payment Summary (EPS) is a report to shows adjustments to liability that can’t be shown on the full payment submission.  It should be sent to HMRC after you have finished the last pay period for the tax month.  EPS is used when reclaiming statutory payments, recording a nil payment or to notify HMRC that you’re going to claim your employment allowance.  

 

Penalties for Late Submission of FPS 

RTI relies on real time submission of employee information. You can get a penalty from HMRC if: 

  • your Full Payment Submission (FPS) was late 

  • you did not send: 

    • the expected number of FPSs 

    • an Employer Payment Summary (EPS) when you did not pay any employees in a tax month 

 

Automated RTI Submissions 

HMRC checks payroll software to evaluate whether they are RTI compliant, and it keeps a list of approved software suppliers. At Mascolo & Styles we use award winning software Sage50cloud to automatically enable RTI returns and ensure compliance. With over 22 years' experience in payroll processing, we understand the importance of providing an accurate and reliable payroll service.  Call us on O142O 544 444 to discuss your payroll requirements

Mascolo & Styles