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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE RTI: RTI overview and legislation: RTI overview

RTI overview

Real Time Information (RTI) is about employers reporting Pay as You Earn (PAYE), National Insurance Contributions (NIC), Student Loan Deductions (SLD) and statutory payment information to HMRC on or before making a payment to an employee. This enables HMRC to:

  • calculate how much the employer is due to pay for each payment period
  • make sure the correct information is passed to the Department for Work & Pensions (DWP) for the purpose of calculating and adjusting payment of Universal Credit.

As part of the development of RTI, some employers volunteered to join RTI early, as part of a pilot, with up to 55,000 schemes reporting PAYE in real time as at March 2013. The majority of employers were mandated to join RTI from April 2013, with all employers routinely reporting PAYE in real time from October 2013.

Mandation date

The date of migration of each employer to RTI is shown on:

  • BROCS - General Designatory Data Screen
  • ETMP - RTI Registration Tab
  • IDMS – View Work Item Detail Screen.

Employer obligations

The introduction of RTI did not change the way that employers operate PAYE, but it did change the way they report details of PAYE deductions and statutory payments to HMRC.

Under RTI, employers are required to report specified information on or before making payments to employees on a Full Payment Submission (FPS). This information includes, for each employee:

  • the payments and deductions for the period the return relates to (this will normally be a week or month but can be less if an employer pays more frequently)
  • year-to-date pay and tax information reported on the FPS return.

Employers are not required to provide a summary of PAYE liabilities due on the RTI return. This is now calculated by HMRC based on the information in the return.

Most employers need to make multiple returns to HMRC, on a weekly or monthly basis, instead of one annual return (form P35) at the year end.

HMRC agreed a temporary relaxation (until April 2014), to the ‘on or before’ requirement for employers with fewer than 50 employees, with these employers being allowed to send information to HMRC by the date of their regular payroll run but by no later than the end of the tax month.

Employers must pay HMRC by the same dates and with the same frequency as before RTI.

CIS deductions made from subcontractors do not fall within the scope of RTI. The current requirement for contractors to file monthly CIS300 returns still applies.

PAYE registration criteria

Employers who have no employees liable to pay tax, NIC or SLD may not require a PAYE scheme. Employers must register for PAYE and report under RTI if any employee earns at or above the lower earnings limit or any employee has another job. Full details of PAYE registration criteria can be found at How to register as an employer (GOV.UK).

Exemptions from online filing

The vast majority of employers send their RTI returns online but there are three groups of employers able to claim exemption; they are:

  • practising members of religious societies or orders, whose beliefs are incompatible with the use of electronic methods of communication
  • care and support employers who meet the following conditions:
    • the care or support services must be provided to the employer or a member of their family
    • the recipient of the services must have a physical or mental disability, or be elderly or infirm
    • the employer cannot have received a tax-free payment in respect of online filing in the preceding three years
    • the employer must be filing their return themselves, not having someone else (such as a relative or accountant) file it on their behalf
  • employers who have applied for digital exclusion (those who have a disability, lack of internet access, elderly employers unable to access an online channel because of their age, embassy employees that qualify under certain circumstances); see DMBM519240 on paper filers.

HMRC roles and responsibilities

There were no changes to roles and responsibilities with the introduction of RTI:

  • PT Operations deal with work such as overpayments, scheme maintenance, return processing and related queries
  • Debt Management are responsible for recovery of PAYE debts and returns
  • Corporate Finance (Banking) issue advances and repayments.

RTI did, however, bring some changes for HMRC as a whole, and for DM as far as recovery is concerned.

Because RTI information is available in year, it allows HMRC to:

  • reconcile payments made to amounts actually due
  • identify underpayments in year, each month or quarter
  • identify outstanding returns in year
  • take prompt recovery action for the actual amount due.

This means that DM are aware of outstanding debts or returns each month or quarter, rather than waiting until the end of year to reconcile the employer’s P35.

Monthly and quarterly underpayments are sent to IDMS as they become due, and/or whether there are open work items on IDMS. When an employer fails to submit a return, HMRC are able to ‘specify’ a legally enforceable amount which will be sent to IDMS for Debt Management to pursue.