There are two ways of sending information about payments you make to your employee to HM Revenue & Customs (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.
Introduction to paper filing
Universal Credit/tax credits and RTI paper process
Simplified Deductions scheme
RTI paper process
Paper filing refers to a series of paper forms and processes that are used by an employer to tell HMRC information about the events that happen with an employee (e.g. them joining/leaving) and the payments made to employees. The forms and processes are aligned with the requirements of the Real Time Information (RTI) programme, as far as possible.
One of the objectives of the introduction of RTI is to support the introduction of the welfare benefit called Universal Credit, which is being phased in over a period of several years. 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 Department for Work and Pensions (DWP) themselves each month. This is because this information will not be received automatically by DWP from you via RTI submissions as it will be from online filers. 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 full introduction of Universal Credit will not be complete for some time, HMRC may use the information you provide on your Pay As You Earn (PAYE) submissions to amend any tax credit awards your employee has 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.
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.
A typical employee lifecycle involves the employee starting (either with a form P45 or without one), you paying them and making the ongoing payroll calculations, you sending information to HMRC and then at some stage, the employee leaving. Under the RTI paper process, each of these events requires some action on your part. The links below explain more:
New starters – we look at the starter procedure in our ‘taking on a new employee’ section.
Ongoing calculations – 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, every quarter. We talk you through the relevant 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.
For information on penalties under RTI, for example for not doing payroll tasks at the correct time, or not doing them accurately, go to our getting things wrong section.
There are also several end of year tasks to be aware of. For example, certain forms need to be completed by employers after the end of the tax year. We look at these requirements in more detail in our dedicated section.