There are two ways of running a payroll and sending information about payments you make to your personal assistant to HMRC – on paper (called paper filing) or online (called online filing).
HMRC require most people to send the information online, using a system called ‘Real Time Information’. If you are employing a personal assistant however, HMRC might treat you as a ‘care and support employer’ which means you can still use paper to send information to HMRC.
This page tells you more about online and paper filing.
Since 6th April 2013, information about employee payments and deductions has been submitted by most employers electronically, every time an employee gets paid. This is done in “real time”, hence the name Real Time Information (RTI).
Most employers will be dealing with RTI electronically during the 2016/17 tax year.
Using the RTI system to send information and payments electronically to HMRC is called online filing. You can find out how to register for online filing on our ‘registering as an employer’ page.
For your information, before RTI was introduced, HMRC received payroll information from employers once a year – at the end of the tax year. This meant that if there was a mistake, for example, the wrong amount of tax had been deducted from the employee, they were often only able to do something about it a long time after it had happened. Therefore RTI, in theory, means that HMRC can deal with potential under or over payments much more quickly as they see the pay information more frequently and so can take action to correct any problems sooner. This might include issuing a different tax code to adjust the tax that is being deducted at source.
An alternative option for some people who employ personal assistants and those who cannot do things “online” (sometimes referred to as 'digitally excluded') is to send information to HMRC on paper. This is ‘paper filing’.
If you qualify for paper filing you will need to send forms to HMRC quarterly. The forms are based on the real time information system used for people who file online. You can find out more about the RTI paper process in our section on paper filing.
HMRC expect most people to use online filing. Only a handful of employers are exempt from online filing so that they can send information to HMRC on paper. You cannot choose to use paper filing because you prefer it. You can only use paper filing if you are:
- Someone who takes on a personal assistant, called a care and support employer by HMRC, and who meets the conditions explained below.
- Exempt from online filing on religious grounds.
- Considered by HMRC to be unable to file online (often called the ‘digitally excluded').
We explain about each of these exemptions in more detail below.
You may be interested to know that around 1,000 employers are exempt from reporting electronically, and are reporting their real time PAYE information to HMRC on paper. The vast majority of the 1,000 employers are care and support employers.
You can file on paper as long as your personal assistant provides the care or support services at or from your home, and all three of the following conditions are met:
- The care or support services must be provided to the employer or a member of their family.
- The recipient of the services must have a physical or mental disability, or be elderly or infirm.
- The employer must be filing their return themselves, not having someone else such as a friend or accountant file it on their behalf.
Practicing members of religious societies or orders whose beliefs are incompatible with the use of electronic methods of communication are exempt from online filing requirements.
If you do not qualify for paper filing by meeting the care and support employer conditions above or qualify for an exemption on religious grounds, you may still be able to file on paper if HMRC consider you are unable to file online.
In exceptional circumstances, if you can show that:
- you will have significant difficulty in using an online channel, or
- you are unable to use an online channel,
then HMRC will consider you to be unable to file online and allow you to use paper filing instead.
You can find out more about what HMRC consider to be exceptional circumstances on the GOV.UK website.
Note however, that it is HMRC's intention that the paper filing option will only remain available to those who are unable to file online until April 2017.
Even if you meet the conditions above that mean HMRC will allow you to file on paper, you can still choose to file online. You may choose to use RTI online for speed and convenience as reporting electronically is fast, secure and will also carry out your calculations for you (such as how much tax and NIC to deduct). The information to be submitted to HMRC is produced as part of this process and is submitted automatically by the payroll software that you will use.
We give you a full run down on online RTI and some software options for you in our RTI section. If you are currently noted on HMRC’s systems as a paper filer but would like to switch to reporting electronically, you can make the switch at any time but should phone HMRC on 0300 200 3200 (Textphone 0300 200 3212). It is important that you let HMRC know before you make any attempts to file online, as they will have to update their systems to let you do this.
Provided you meet the conditions for paper filing, you have the option of sending your payroll submissions to HMRC either online or paper. This means that if you are noted on HMRC’s systems as an online filer, but wish to switch to paper, then it should be possible to do so.
However, you should not just stop filing your online returns as HMRC’s systems will generate automatic notifications – you will need to write to HMRC to tell them why you think you should be exempt from filing online. HMRC can then update their records so that you will avoid a penalty notice for not filing your returns online.
Employers can write to HMRC at the following address:
National Insurance Contributions and Employers Office
HM Revenue and Customs
You do not need to include a street name, city name or PO Box when writing to this address.