Payroll reporting for salary advances consultation

HMRC have published a new consultation 'Draft regulations: proposed amendments in respect of salary advances'. It is seeking views on the changes to secondary legislation to allow employers to delay the reporting of such advances to employees.

• Currently, salary advances are treated as a payment on account of earnings that trigger a reporting requirement for Real-Time Reporting (RTI). A Full Payment Submission (FPS) must be submitted.
• Employers must report the advance payment on or before the date of the advance. They must then report the remainder of the payment on the regular payment date.
• Long-term advances, often made to assist purchases such as season tickets or bicycles, do not fall within the scope of these types of advances.
• This additional reporting is recognised as administratively burdensome, so the amendments to the secondary legislation seek to simplify the process. It is anticipated that the lack of additional returns will reduce the risk of errors.
• It is intended that the amendments will mean that employers can delay the reporting of the advance until the remainder is paid. There will then only be one submission to cover both payments.
• There should be no impact on other RTI/PAYE processes.
• It is not intended to apply to employees whose normal payment intervals are less than one week or more than one month.

The consultation is open until 9 October 2023.

Questions:

1. Do the amendments meet the stated policy aims?
2. Will these changes cause any reporting difficulties for employers and their agents?
3. Employers who wish to make salary advances outside of a third-party scheme will need to ensure that their software can report the salary advance at the next scheduled reporting date. Other than that, HMRC does not believe that these changes will require significant revision of current RTI reporting software. Do you agree? If not, what other changes do you anticipate will be necessary?
4. Will these changes cause any administrative difficulties for employers and their agents?
5. Will these changes produce any other consequences, for employers or their workers?

Responses can be submitted via email to: This email address is being protected from spambots. You need JavaScript enabled to view it.

Useful guides on this topic

RTI: Real-Time Information for PAYE
What is RTI: Real-Time Information (RTI) reporting for PAYE? How does it work?

Penalties: RTI (Real-Time Information for PAYE)
What penalties apply to PAYE Real Time Information (RTI) reporting and payments?

External link

Open consultation: Draft regulations: proposed amendments in respect of salary advances