Real Time Information – What is it and how does it affect your business.
Real time information (RTI) relates to Pay As You Earn (PAYE) schemes and employee deductions on wages and pensions. Officially implemented in April 2013, HMRC changed the rules on the reporting of payments to staff, stating that any UK employer must now submit a report to HMRC every time a company pays an employee, rather than once a year.
These RTI submissions can include:
- Full Payment Submission (FPS) – Sent each time that a employer pays their employees including information such as gross pay, tax deductions, student loan information or additional payments such as Statutory Maternity Pay (SMP) together with year to date figures.
- Employer Payment Summary – this informs HRMC whether any payments have been claimed by the company in a particular month such as paternity pay or deductions, for example Construction Industry Scheme (CIS) deductions.
For businesses, particularly small and medium enterprises, the new RTI rules often mean you have to spend more resources investing in accounting software and completing paperwork and admin. This can leave you with less time to spend actually running the business, but it is essential that this accounting process is completed on time and correctly.
There can be serious consequences should you not submit your RTI in time or do not submit a report when required. These include late submission penalties starting from £100 for businesses with up to 9 employees up to £400 per late submission for companies with 250 or more employees (currently only businesses with 50+ employees are being penalised, but as of 6th March 2015 all businesses will face penalties for late RTI submissions).
If your submissions are more than 3 months late, you may face an additional penalty of 5% of the tax and National Insurance (NI) that was due to be reported.
At Harvey Telford and Bates we manage Payroll for businesses from those with one to multiple employees with our Payroll Specialist Andrea providing support to our clients and managing the on-going task of RTI submissions.
As part of Andrea’s role, we are always looking to make the processes involved in payroll and RTI as simple and effective as possible for our clients and business in general – including changing the processes when need be. We believe that the current RTI legislation is too onerous for businesses, particularly smaller ones and therefore we are supporting the online petition to change the regulations, which we would be grateful if you would take the time to sign.
E-Petition on Moving RTI Filing Deadline to the 19th
The e-petition requests that HMRC moves the RTI filing from absolute real-time to the19th of the following tax month, bringing it in line with current acceptable PAYE filings.
This relaxed deadline would provide HMRC with up to date monthly information, whilst affording businesses the flexibility to account for any potential delays such as additional time required for processing or other issues for example accountants not receiving the relevant information on time from clients to make the submissions.
If you would like more information on how RTI affects your business or need assistance in managing your Payroll and RTI submissions, why not get in touch with the team and see how we can benefit your business.
