The Real Time Information requirements are wide ranging and can be a burden on the employers. If your business is in Addington, Bromley, Kent and London areas we, at Adiva Accountants in Addington, can help you to set up and run the payroll for you.
We cover below details of how payroll information has to be submitted to HMRC under Real Time Information (RTI).
RTI requires the employers or their agents to make regular payroll submissions for each pay period during the year. These submissions detail payments and deductions made from employees each time they are paid. The two main types of returns which an employer needs to make are detailed below.
Full Payment Submission (FPS)
The Full Payment Submission (FPS) must be sent to HMRC on or before the date employees are paid. This submission details pay and deductions made from an employee. You can make only one FPS submission a month.
Employer Payment Summary (EPS)
Employers may also have to make a further return to HMRC each month (EPS) to cover the following situations:
- where no employees were paid in the tax month
- where the employer has received advance funding to cover statutory payments
- where statutory payments are recoverable (such as SMP, OSPP and ShPP) together with the SMP NIC compensation payment or
- where CIS deductions are suffered, which could be offset (companies only)
HMRC will offset the amounts recoverable against the amount due from the FPS to calculate what should be payable. The EPS needs to be submitted to HMRC by the 19th of the month. This way it can be offset against the payment due for the previous tax month.
The payments to HMRC
Please note that under RTI, HMRC are aware of the amount due to them on a monthly/quarterly basis. This will be part of the information reported to HMRC through the FPS and EPS returns.
So, HMRC will expect to receive the PAYE and NIC deductions less the amounts recoverable, each month or quarter.
Year end procedures
At the end of the tax year a final FPS or EPS return must be made to advise HMRC that all payments and deductions have been reported to HMRC. This is called Final submission.
It is not possible under RTI to put through wages at the year end of the business and assume this has been paid throughout the year. So, you cannot utilise a family member’s national insurance lower earnings limit which gives them a credit for state pension and statutory payment purposes. So, wages should be paid regularly and details provided to HMRC through the RTI system on a timely basis.
There are scenarios where it is impractical to report in real time. So, the regulations allow up to an additional seven days for reporting the payment in specified circumstances.
Please do contact us at Adiva Accountants in Addington, if you would like any further help or advice on payroll procedures.