Accurate and on Time Reporting of Payroll Information
In the latest Employers Bulletin (August) published by HMRC there are several sections devoted to RTI submissions and including for new starters. HMRC again stress the need for accurate and on time reporting of payroll information.
What is RTI?
RTI is possibly the most significant change ever made to Pay As You Earn (PAYE). RTI, or Real Time Information, is a method of reporting payroll submissions to HMRC and is aiming to make this process more efficient and responsive.
RTI is made up of two parts, a full payment submission, or FPS, and an employer payment summary, or EPS.
The FPS submission contains information about payments and deductions to employees, and must be made to HMRC on or before pay day. An EPS contains company information for items such as SMP, Employment Allowance or Apprenticeship Levy. The EPS must arrive with HMRC by the 19th of the following month.
What has changed?
Within the bulletin there are no major changes announced for RTI submissions, but they do have some reminders and guidelines. The payroll information must be reported accurately and on time, and your organisation faces penalties if you fail with this.
HMRC have said they will not automatically impose a penalty, but will be following a risk based approach for late filing penalties as for last tax year. At the same time they have requested that people do not ignore the automatic warning messages sent out.
What is needed for new starters?
New starter information is determined to some extent by your particular organisation’s needs. If you do not have an electronic payslip portal, then your payroll does not need an employee email address for instance. Date of birth is probably essential, as so much within payroll can now be affected by this.
In this month’s bulletin the interesting highlight is regarding the employee postcode. This must be accurate as this is one of the fields HMRC use to identify the employee. If this is inaccurate as well as issues with HMRC, there can also be ramifications with the Department for Work and Pensions.
What is the significance?
There may be no changes, and these are all just timely reminders from HMRC to take care with your payroll. But, there may be changes with the speed in which tax codes are issued, and faster changes in benefits, and inaccurate submissions will make errors far more likely. Remember the announcement last summer of dynamic PAYE tax coding, and also the changes in treatment of transferred employees in April 2017 resulting in widespread Employee Duplication.
A new employee should double check the information they provide, leaving fields blank is preferable to inaccurate information. This, together with some care with the payroll process, should help ensure compliance with the HMRC request for accurate and on time payroll submissions.