Paper filing

There are two ways of sending information about payments you make to your personal assistant (payroll data) to HMRC. One way is on paper (called paper filing) and the other way is online (called online filing).

You can find out more about each, including who qualifies for paper filing, in our ‘filing options' section.

The information in this section is for you if you are required to operate PAYE and have agreement from HMRC to be able to file on paper.

Introduction to paper filing
Universal Credit/tax credits and RTI paper process
Simplified Deductions scheme
RTI paper process

Introduction to paper filing

Paper filing refers to a series of paper forms and processes that are used, as an employer, to tell HMRC information about the events that happen with an employee (e.g. them joining/leaving) and the payments you make to your employees. 

There was a paper process for doing all the different tasks up to 5 April 2014 – the old style paper process. From 6 April 2014, you are still able to send information to HMRC on paper, but the forms and timings of providing it have changed. We refer to this new process here as the ‘RTI paper process’. Essentially, the main difference between the two is that under the RTI paper process, you send information to HMRC quarterly rather than annually.

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Universal Credit/tax credits and RTI paper process

One of the objectives of the introduction of RTI is to support the introduction of a new welfare benefit called Universal Credit. The Department of Work and Pensions, DWP, will use the ongoing feed of data from an employer to calculate accurate Universal Credit benefits payments. Therefore you will need to tell your employees if you are a paper filer. If they claim Universal Credit they will need to report their earnings from you to the DWP themselves each month and their reported earnings will be checked with the information you provide each quarter to ensure their Universal Credit payments are correct.

Please note that as the changeover to Universal Credit will not be complete for some time, HMRC may use the information you provide on your PAYE submissions to calculate and pay any tax credits your employees are entitled to in the meantime. It’s important, therefore, that the information you provide is both timely and accurate. You can find out more about RTI and tax credits on our sister site RevenueBenefits.

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Simplified PAYE Deductions Scheme

You may have heard, in the past, of people talking about a ‘simplified’ PAYE scheme used by care and support employers.

This refers to the Simplified PAYE Deductions Scheme – or SPDS, which provided an alternative to standard PAYE and was used by individuals employing personal assistants within their own homes who were paid less than £160 a week. 

The SPDS scheme was closed to new users after 2012/13.

For 2014/15 onwards, the SPDS was closed fully. 

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RTI paper process

A typical employee lifecycle involves the employee starting (either with a form P45 or without one), paying them and making the ongoing payroll calculations, sending information to HMRC and then at some stage, the employee leaving. Under the RTI paper process, each of these events require some action on your part – slightly different to that required under the old style paper process. The links below explain more:

New starters with a P45 – a P45 is the form an employee brings with them from the job they have just left confirming their personal details and details of any pay and tax for the prior part of the tax year. We tell you what you need to do with that information in this section.

New starters without a P45 – there are a number of reasons your employee may not have a P45. Here we tell you how to go about collecting the information that would otherwise be on the P45 and what to do with it. 

Ongoing calculations – we give you some information about performing the ongoing calculations that you will need to do so that you know how much to pay your employee (and how much to pay HMRC).

RTI paper process submissions – this consists of  sending HMRC pay and tax information, employee by employee, which should tie up with all the payments you have made on their account to HMRC for the tax year. We talk you through the forms here.

Leaver procedure – there is a set procedure for sending information to HMRC about an employee that is leaving your employment and giving the employee a form P45. We provide information about that here.

For information on penalties under RTI paper filing, for example for not doing payroll tasks at the correct time, or not doing them accurately, go to our getting things wrong section.