Insights

As of 6th April 2013, HMRC will be significantly changing the way in which payroll information is to be submitted and the forms they expect employers to use. RJP has covered these changes and what they mean in detail within previous blogs. We thought it would be helpful to do another one, in which we summarise the main changes to be aware of. It is very important that clients take the necessary steps to get prepared or they will face penalties for non-compliance.

RTI changes summarised

The main changes to be aware of are as follows:

• Annual reporting on forms P35 and P14 will no longer be applicable. This is being replaced with a monthly summary to HMRC, known as a Full Payment Summary (FPS).
• The FPS summary MUST be submitted ON OR BEFORE the day of payment made to employees. Failure to do this could result in penalties for supplying this information late.
• Forms P45 and P46 (including P46(Pen) and P46(Expat)) will no longer be required. Form P45 can still be completed, but is used for employee records only. Details of starters and leavers will be submitted to HMRC through the monthly FPS.
• ALL employees need to be included on the payroll, including those who earn below the NIC Lower Earnings Limit, and temporary or casual workers.
• In addition to the FPS, HMRC have introduced an Employment Payment Summary (EPS). This will be used to report items such as CIS suffered each month, statutory payments, and any changes to monthly payments that may not be clear from the FPS.
• CIS suffered will need to be reported and deducted from any PAYE due each month as it is paid, using the Employment Payment Summary (EPS).

If payments are only made once a year, it will still be possible to run an annual payroll. A submission at the start of the year confirming the employee or director’s details, together with confirmation that no payments will be made that month and that the record will be inactive for a period of time. Only when a payment is made will a submission then need to be made to HMRC.

RTI means additional information is needed for payroll submissions

As a result of these changes, additional information will be needed in order to meet the requirements of the new system. This will include:

• Hours worked for each member of staff, including overtime
• Dates of payments
• CIS suffered
• ADVANCE approval for each monthly payroll through FPS
• Full names, addresses, dates of birth, gender, and National Insurance Numbers will be needed for each employee. These must be accurate.

What will not change as a result of RTI?

Services that won’t be changing as a result of RTI include:

• Coding notices
• Payment dates
• Forms P60
• Expenses and benefits (P11D, P11D(b) and P9)
• CIS payment and reporting process.

If you have any questions relating to the introduction of RTI please do not hesitate to contact either Jamie Spears or Victoria Rampton by emailing post@rjp.co.uk.