What has changed under RTI?

Real Time Information reporting (RTI) made some major changes to how and when you send your payroll information to HMRC when it was introduced in 2013.

The table below highlights some of the main differences.

PAYE before RTI

RTI System

Year end  

All pay details for employees sent to HMRC at the end of the year on forms P35 and P14.        

No P35 or P14 – employers submit pay and tax details to HMRC throughout the tax year.

These submissions are called “Full Payment Submissions”, or FPS. 

You may also need to send an "Employment Payment Summary" (EPS). for HMRC to apply any reduction (e.g. statutory pay) on what you will owe from your FPS.

If you have not paid any employees in a tax month you send an EPS instead of an FPS.

End of year forms sent to HMRC by 19th May following the end of the tax year.

Final FPS (or EPS, depending on the circumstances) to be sent to HMRC by 19th April following the end of the tax year.

If you have not submitted your final FPS/EPS by that date but you need to report PAYE details, you will need to submit an Earlier Years Update (EYU); you must do this by 19 May.

Data

Minimum data items about each employee sent to HMRC, e.g. name, date of birth, NINO

It is now enshrined within the PAYE regulations that an employer must verify all this minimum identity data noting the source document (which might be a birth certificate, passport or utility bill for example).

New data is also required to be sent to HMRC – e.g. the number of hours worked weekly for each employee – less than 16, 16 – 30, more than 30.

Employees earning below the NIC Lower Earnings Limit (LEL)

No action required if all employees earning below the NIC LEL.

If you had a mixture of employees above and below the LEL then they would all be reported at year end.                                                                                                                                                                                                                                      

If all your employees earn below the LEL then you are still not required to do anything.
 
However, if you are required to register as an employer in respect of one employee, you will have to report information about all employees in each RTI submission, even those earning below the LEL – not just the employee or employees whose circumstances led to you having to register.

Taking on a new employee

Employee gave new employer a P45 or P46 who in turn submitted to HMRC.

You are no longer required to file forms 'P45' and 'P46' to HMRC as new starter information is instead included as part of the regular RTI submission.

Where there was no P45, form P46 contained a starter declaration for employee to complete to help employer work out which tax code to use.

Starter declaration to be completed for all new employees (even if they have a P45).

When an employee leaves

Employer sent part 1 of P45 to HMRC and gave parts 1A, 2 and 3 to employee.                     

No need to file a P45 to HMRC when somebody leaves (although will still issue a leaver with a P45) as information is included as part of the regular RTI submission.

What has not changed?

The way that you calculate PAYE, pay your employees and make payments to HMRC has NOT changed.

Employers will still have to issue P60s to employees and pension recipients following the end of each tax year. Benefits in kind are not included under RTI so employers will still be required to submit forms P9D (up to and including 2015/16 tax year only), P11D and P11D(b) if applicable, following the end of each tax year.

Back to top