Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: real time information (RTI): situations where employers do not have to report PAYE information 'on or before' they pay an employee

Employers who are registered for PAYE will have to report PAYE information in real time ‘on or before’ payment is made. However, in certain circumstances an employer may not be able to payroll information each time they pay an employee. The table below shows the situations where HMRC accepts that a Full Payment Submission (FPS) does not have to be submitted on or before a payment is made and what the employer must do instead.

In all other cases payments must be reported on or before the time the payment to the employee is made.

## What is the situation? ## What is included? ## When do the payments have to be reported?
     
Payments to employees for whom employers do not have to maintain a Deductions Working Sheet (P11) Payments to  
  • casual employees who work for less than a week and who do not provide a P45
  • employees who do not present a P45 to the employer and who are paid below the Lower Earnings Limit. The earliest of
  • the next ‘regular’ return the employer is required to send, or
  • 7 days following the day on which the payment is made.    
      Payments which vary according to the work done on the day, where it is impractical to report on or before Payments which meet all of the following conditions
  • made to employees for work done on the day of payment before they leave the place of work
  • made at a time or place where it would be impractical for it to be reported ‘on or before’ the time of payment
  • it is not reasonably practicable for the employer to calculate the payment due before completion of the work.
This includes, for example, where someone is employed to pick crops in a field and they are paid in cash based on the amount they have picked. It also includes catering staff paid by the hour at the end of their shift. The earliest of
  • the next ‘regular’ return the employer is required to send, or
  • 7 days following the day on which the payment is made.    
      Benefits and expenses that are not subject to tax under PAYE, but are subject to Class 1 NIC. For example, where an employer pays an employee’s phone bill direct to the phone company.
The table at page 63 of the CWG2 (2013) sets out the types of payments that are included in this category. The earliest of
  • the time that the employer calculates the NICs that are due on the payment or
  • 14 days after the end of the tax month in which the payment was made, for example for a payment made between 6 July and 5 August, this would be 19 August.    
      Notional payments Certain types of payment where there is no transfer of money from the employer to the employee. These include certain payments by an intermediary of an employer, certain payments by non UK employers or payment in special types of income.
HMRC guidance about what a notional payment is can be found at PAYE for shares and other non-cash payments (HMRC website). The earliest of
  • the time that the employer operates PAYE on the payment or
  • 14 days after the end of the tax month in which the payment was made, for example for a payment made between 6 July and 5 August, this would be 19 August.  
      Earnings and notional payments delivered by overseas employers and third parties to employees for duties performed on assignment in the UK or overseas.
Employment income paid in respect of employment-related securities (for example, on the exercise of share options). Payments where an employer is operating reasonable and currently accepted payroll and administrative practices and it is not possible to operate PAYE and/or calculate NICs to be deducted by the PAYE deadline. HMRC will apply a common sense approach in-year where employers in these situations have a reasonable excuse for not reporting the information by the end of the pay period or the 19th of the following month.
     
  Ad hoc payments made outside of the regular payroll, including marginal items of pay for National Insurance purposes. For example
  • a new starter is notified to the payroll clerk late
  • an overtime payment is missed off the payroll by mistake, despite the employer taking reasonable care to ensure this is reported
  • an ad hoc advance of salary.

Guidance on the difference between a loan and an advance can be found in EIM42280.

Note: Payments are not considered to be ad hoc where it is established practice for some earnings to be paid outside the normal payroll cycle, for example where overtime is always paid more frequently than the basic salary or wage payments. Such payments must be reported ‘on or before’ the time they are made. The next time the regular payroll is run.

Note about National Insurance

Where the payment is not a marginal item of pay for National Insurance, see page 6 of the CWG2 (2013), National Insurance should be calculated for the period that the payment was made in.