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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: PAYE RTI: payments: payment frequency

Automatic review of employer’s payment frequency

Annual payment status

An employer has an annual payment status where they make payments to employees and file Full Payment Submissions (FPS) in one tax month only during the tax year. The effect of the annual status is that the system only expects FPSs for one tax month each tax year. The amount payable is still due by the 19th or the 22nd of the expected month depending on the method of payment used.

If an FPS is received prior to the expected payment month, ETMP will automatically change the expected payment month and the scheme will remain annual.

If an employer submits an FPS after the expected payment month a specified charge will have already been raised. Once the FPS is received, ETMP will reverse the specified charge and replace it with the FPS, retaining the due date of the specified charge. The scheme will remain annual.

If the employer submits an FPS in more than one tax month in the tax year (unless it is a correction FPS relating to the expected payment month), ETMP will change the payment status to monthly as annual payment status is no longer appropriate.

Quarterly payment status

ETMP automatically reviews schemes after each quarter end to establish if quarterly payer status is still appropriate. If the net amount payable for the tax year to date (in other words, from the 6 April to the date of the review) is £18,000 or more, ETMP changes the payment frequency to monthly and makes the scheme a Band Type 4.

Quarterly payers are still required to file RTI returns weekly or monthly.

ETMP will exclude any schemes from this review where the quarterly is signal set. For example, some appendix 6 and barrister senior clerk schemes are allowed to pay quarterly over the normal limit.

Advising the employer of changes to payment status

When ETMP changes the payment status to monthly or quarterly, it automatically issues a ‘Change of PAYE payment frequency ’ letter (RTI200) advising the employer of the change.

If you are contacted by an employer whose status has been changed from an annual to monthly payer, who states the monthly deductions will on average be below £1,500 and wants to make quarterly payments, you must manually amend the payment frequency on ETMP to quarterly; see ETMP Helpcard 35 Changing Payment Frequency (public folder).