Larsen & Co


Paying your employees – real time information

By October 2013 real time information – RTI, will be compulsory for everyone paying employees (including directors).

This is the biggest change to the way payroll is administered since 1944 when PAYE was first introduced.

RTI means that every employer will submit information to HM Revenue and Customs after every pay period as opposed to the current position of only sending in information once a year. There will be 5 submission types for every employer made at different periods.

Although there will be regular submissions to HM Revenue and Customs the final submission of the year will still need to include the information currently contained in the P35 answering all of HM Revenue and Customs questions. You will also still need to produce P60’s for employees and P11D’s and P11D(b)’s for expenses and benefits.

After an initial pilot scheme and an extended pilot scheme there will be a soft launch running from November 2012 to March 2013, during which approximately 250,000 employers will move to RTI ahead of the mandatory migration period from April 2013 to October 2013.

Software providers are in the process of making the necessary changes to their software to ensure full compliance and may give additional support during the soft launch period.

For anyone not using software, it will be almost impossible to run your payroll in the future without any software as the submissions will all be made online.

The five submissions that employers will make are as follows:

Employer Alignment Submission (EAS)

Unlike the other submissions this will take place just once to ensure that the start up information held by HM Revenue and Customs agrees to the employers information. Currently HM Revenue and Customs do not intend to make this compulsory for employers with less than 250 employees, but it is recommended that it is performed to ensure the data is aligned.

Full payment Submission (FPS)

After each pay period once the relevant records have been updated but before employees are paid a full submission will be made to HM Revenue and Customs. This is similar to the information on the P35 end of year return, but only includes one pay period as opposed to the P35 which shows the whole year information.

For employers with weekly, monthly and 4 weekly paid staff, there may be a number of submissions every month.

Employer Payment Submission (EPS)

The information on the FPS only shows the NI and PAYE due for a pay period without adjustments. Any adjustments required for such things as CIS payments, maternity pay etc, will be processed through the EPS either monthly or quarterly depending on your normal payments.

National Insurance Verification Request (NVR)

This will allow employers to verify the NI number of new employees or to request one where an employee does not know their number.

Earlier Year Update (EYU)

The EYU will allow employers to make changes to prior year tax figures after the final submission of the year.

If you have any queries regarding the implementation of the scheme or you would like change the way your payroll is currently being processed please contact me.