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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
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Supporting Guidance: employer compliance: guidance by subject: real time information (RTI): introduction

Real Time Information (RTI) is about reporting PAYE, NIC and Student Loan Deductions, together with Statutory Payment information, ‘on or before’ an employer makes a payment to an employee. For most employers this will mean reporting information to HMRC on a weekly or monthly basis in a Full Payment Submission (FPS) and Employer Payment Summary (EPS), see COG904240, but can be more often if an employer makes payments more frequently.

For situations where an employer does not have to report PAYE information ‘on or before’ they pay an employee, see COG904230.

Prior to the introduction of reporting in real time, employers had to submit an Employer’s Annual Return to HMRC by 19 May following the end of the tax year. This comprised:

  • a form P14 for each employee where a form P11 (or equivalent) was maintained, see COG905320 and
  • a form P35 showing details of tax and National Insurance deductions from all employees, together with details of statutory payments recovered in the tax year.

2012-13 was the last tax year for the majority of employers to file an Employer’s Annual Return as most employers started operating PAYE in real time from 6 April 2013.

Forms P14 and P35 end of year returns are not to be used by any employer required to report information in real time.

Where an employer wants to amend a P14 or P35 for a pre-RTI year, you should follow the guidance in COG915600 onwards.

Note: CIS deductions do not fall within the scope of RTI. Contractors are required to file monthly CIS300 returns. But, where a limited company acts as a subcontractor and suffers CIS deductions, they report these amounts to HMRC on an Employer Payment Summary (EPS), see COG904240, and subtract these from the amount of PAYE due to be paid to HMRC.

RTI does not change

  • how employers operate or calculate PAYE, NIC, Student Loan Deductions or statutory payments
  • the date and frequency of when employers must pay HMRC:

    • 19th of the month where payment is made by post
    • 22nd of the month where payment is made electronically
  • how expenses and benefits are reported; employers will continue to submit forms P11D and P11D(b), unless, from 6 April 2016
    • the exemption for amounts which would otherwise be deductible applies (see EIM30200)
    • HMRC has approved Bespoke Scale Rate expenses (see EIM30250)
    • the employer is voluntary payrolling benefits.

RTI does change

  • the way employers report PAYE details to HMRC.

Employers are required to report for each employee

  • payments and deductions for the period the Full Payment Submission (see COG904240) relates to and
  • the total year to date pay and tax information.

Almost all employers are required to submit RTI information electronically.

Employers exempt from filing online

A small number of employers are currently exempt from filing online (HMRC website). For those employers who are required to report in real time there will be a paper channel to submit RTI information manually. They will be required to submit the same information as those employers who submit RTI information electronically (see COG904220).

Small employers: relaxation to file ‘on or before’ they pay an employee

HMRC relaxed the reporting arrangements forsmall businesses (HMRC website) with fewer than 50 employees until April 2014. Employers with fewer than 50 employees, who found it difficult to report every payment made to employees at the time of payment, could send information to HMRC by the date of their regular payroll run, but no later than the end of the tax month.

The relaxation has been extended until April 2016 for existing employers with 9 or fewer employees (HMRC website). This means that micro employers who need more time to adapt will be able to report PAYE information monthly until April 2016, giving them up to two more years to change their processes and arrangements and enable them to adapt to reporting in real time.

The extended relaxation only applies to existing employers with nine or fewer employees.

All new employers must report PAYE information in real time from April 2014.