Real Time Information (RTI) - FAQs
What is RTI ?
- What is RTI? - From 6 April 2013 employers will have to start reporting PAYE information to HMRC in real time. You may see this referred to as Real Time Information - or RTI. In practice this means that employers will have to send details to HMRC every time they pay an employee using payroll software to send the information electronically as part of their routine payroll process
- Why is HMRC introducing RTI? - HMRC is introducing RTI in order to modernise the Pay As You Earn (PAYE) system and keep pace with changes to modern working patterns. Nowadays, many people have more than one job, and can change jobs more frequently. This means people sometimes pay the wrong amount of tax. RTI provides HMRC with up to date information, so it should be easier to ensure deductions for tax, National Insurance and student loans are accurate.
- What is changing with RTI? - The way that you calculate PAYE, pay your employees and make payments to HMRC is NOT changing. The main difference will be how and when you report your payroll information to HMRC. Instead of sending your information to HMRC once a year (via a 'P35' and 'P14s') you are required to send RTI returns each time that you pay your employees, be that weekly, monthly or otherwise. Also, you will no longer be required to file starter or leaver forms ('P45' and 'P46') to HMRC as this information will be included as part of your regular RTI submission.
- When will I need to start sending RTI returns? - From your first pay date on or after 6 April 2013. So for example if you pay your employees weekly every Friday, your first RTI submission is due on 12 April 2013. If you pay monthly on the last day of the month, your first RTI return is due on 30 April 2013.
- I want to send my first return now so that I am ready for RTI - can I do this? - No. Some employers have volunteered to take part in the 'HMRC RTI pilot' scheme which began in May 2012 and so are already submitting RTI returns. All other UK employers must wait until after 6 April 2013 before joining RTI. If you wish to see how the RTI submission process will work then please see the videos and guides available from www.moneysoft.co.uk/rti for more information.
Getting ready for RTI
- Is Payroll Manager ready to start sending my RTI returns to HMRC? - Yes - Payroll Manager has been granted full HMRC PAYE recognition for RTI and is ready to submit your RTI returns to HMRC from 6 April 2013.
- What are the mandatory data items for RTI? - Every RTI submission requires the correct Surname (or family name), Forename, Date of Birth and Gender for each of your employees. It is not possible to send an RTI return without each of these items. In addition to this, HMRC ask that you provide the correct National Insurance number when known, as this is used to 'match' the data you send to HMRC with that which is held on their database. There is also a new mandatory data item - 'Hours Worked'. For more details of this, and a full list of mandatory fields please see our data validation guide - www.moneysoft.co.uk/support/payroll-software/guide-RTI-data-validation.htm
- How can I check that my data is ready for RTI? - There are a number of reports and validation tools within Payroll Manager that have been designed to help you prepare for RTI. The following video shows how to use these tools - www.moneysoft.co.uk/support/payroll-software/video-RTI-data-validation.htm
Operating under RTI
- How will Payroll Manager handle RTI? - We have developed a new interface to make the management of your RTI returns simple. The 'Employer RTI Schedule' shows which RTI returns need to be sent together with the date that they are due, as well as showing a record of all RTI returns that have already been made during that tax year. This new interface will be available to all Payroll Manager users from April 2013, but if you wish to see how it will operate beforehand please see our video guide www.moneysoft.co.uk/support/payroll-software/video-RTI-first-submission.htm
- When do I need to file my RTI returns? - You need to send your first RTI submission to HMRC on the first pay day on or after 6 April 2013. You will then need to send an RTI return every time you pay your employees e.g. weekly, 2-weekly, 4-weekly or monthly.
- What information will I be sending? - There a number of RTI submission types, the main ones being the Full Payment Submission (FPS) and the Employer Payment Summary (EPS).
The Full Payment Submission (FPS) is the 'main' submission type, and is sent each time that an employer pays their employees. So if employees are paid monthly you send 12 FPS submissions per year, if employees are paid weekly you send 52 FPS submissions and so on. The FPS contains details of all employees that are being paid in that particular pay period including their tax code, gross pay, tax deducted, NIC, sick pay (SSP), student loans and parenting pay (SMP, OSPP, ASPP etc.) together with their year-to-date figures. Each FPS also contains details of employees that have joined or left during that pay period.
The Employer Payment Summary (EPS) Is used to inform HMRC of any statutory payments recovered in any month (e.g. for sick, maternity or paternity pay), or CIS deductions suffered by the company. This is sent on a monthly basis when appropriate. Payroll Manager is able to determine whether or not an EPS is due, and if so prompts you to send it alongside the relevant FPS submission.
- What is meant by the 'alignment' submission and how do I send it? - The 'alignment' process is used to match the data that you hold about your employees (e.g. name, address, NI number etc.) with that held on the HMRC database, and is performed once when you first join the RTI scheme. HMRC allows for two methods of doing this depending on the number of employees that you have. For employers with less than 250 employees (the vast majority of Moneysoft Payroll Manager users) the aligment data is sent automatically as part of the first FPS, and so no additional return is required. For employers with more than 250 employees an additional return is required - the Employer Alignment Submission (EAS). Payroll Manager will send this return before the first FPS for employers with 250 employees or more.
- What if I make a mistake? - If you make a change to a pay period after you have submitted the RTI return for that period (e.g. because you needed to correct a mistake in the payroll), then you do not need to re-submit the return. Because the RTI return contains year-to-date totals, the error will be corrected when you submit the return for the next pay period in the normal way.
- I have heard about a 'Bacs Hash Tag' - what is this and do I need to send it? - The small minority of UK employers that pay their employees using either Direct Bacs software or via a Bacs Bureau will need to generate a 'hash tag' for each employee as part of the FPS submission. The vast majority of employers do not pay their employees this way, for example those using Bank Transfer, Internet Banking, cheque or cash. Payroll Manager can be set to automatically generate this 'hash tag' for employees that are paid via Direct Bacs software or via a Bacs Bureau. The hash tag is used by HMRC to cross-reference the FPS submission with the corresponding Direct Bacs payment submission.
- What happens if one of my employees is irregularly paid? - If your employee is not paid in any one pay period (e.g they may be a casual or seasonal employee, or they may be on long term sick leave) then Payroll Manager will automatically send an 'Irregular Employment Pattern Indicator' within the FPS for that period. This prevents HMRC from assuming that they have left your employment.
- Some of my employees earn below the threshold for tax and National Insurance - do I have to include them on my RTI submission? - Yes. All of your employees, regardless of how much they earn must be entered into Payroll Manager and included in your RTI returns. This includes students and those workers for whom you may have previously used form P38a.
- What about Starters and Leavers - Starter and leaver information is sent as part of the FPS, so you will no longer be filing P45 or P46 forms when someone joins, nor will you file a P45 to HMRC when somebody leaves. You will still need to issue a leaver with a P45, which Payroll Manager will produce for you.
- What happens if I need to pay someone after they have left? - If you need to make a payment to an employee in a pay period after the one in which they left, then you should use tax code 0T on a week1/month1 basis. The details of this extra payment will be sent in the next FPS.
- What do I do at year end - do I still file a P35 / P14? - You will still be required to send a P35 /P14 submission for the tax year 2012-13 (unless you have been sending RTI returns prior to April 2013 as part of the RTI plilot scheme). There will be no end of year P35 / P14 submission for 2013-14 onwards.
- Do I still need to give my employees a P60 at the end of the year? - Yes. Although RTI replaces P35 and P14 reporting it is still necessary to issue each employee with a P60 at year-end. Payroll Manager is accredited by HMRC for printing P60s onto plain paper and as PDF documents.
- I am an agent - will Payroll Manager be able to 'batch-file' my RTI returns? - Yes - we have developed a tool which enables you to send RTI returns for a number of different clients at the same time.
- How does RTI affect the Construction Industry Scheme (CIS)? - RTI involves the submission of PAYE information to HMRC and does not affect CIS returns, which will still be submitted monthly to HMRC in the normal way.
- Will the way which we report employees Expenses and Benefits change with RTI? - No - you will continue to report these items separately using the P11d procedure.
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