Real-Time Information (RTI): HMRC allowed micro-employers to file monthly until April 2016.
Micro-employers, up to nine employees
- HMRC announced in August 2014 that existing employers with nine or fewer employees, who need more time to adapt, can report PAYE information on or before the last payday in the month until April 2016.
- In other words, micro-employers who run weekly payrolls may report RTI monthly.
- Existing employers with fewer than 10 employees, who take advantage of the temporary reporting relaxation, must remember to use late reporting code ‘E’.
- This arrangement does not apply to employees who commenced payrolls on or after 6 April 2014. They are covered by the late filing exemption for small employers which runs until 5 March 2015.
Additionally, HMRC announced in February 2015 that it is giving all employers a period of grace of three days in all RTI filings and so micro-employers need to file within three days of their last payday of the month. This concession also lasts until April 2016.
Alpha Ltd is a micro employer who calculates pay and pays its employees on a weekly basis. They pass their records to a payroll agent to run the payroll on the last pay date of the tax month. Alpha Ltd pays its employees on 10th April, 17th April, 24th April & 1st May. Under the relation agreement Alpha Ltd need not report the payments weekly. Instead, they may be reported as if they had been made on the 4th May (the last payroll of the tax month plus three days).
HMRC provides the following instructions on how to report monthly payments. We note that these instructions may not be easy to follow as not all software will allow flexibility to run weekly or irregular payrolls.
When recording your employee pay information in your Full Payment Submission (FPS):
- Set the ‘Pay frequency’ to how often you actually pay your employees.
- For the ‘Payment date’, use the last payment date in the period.
- For the ‘Tax week/month number’, use the corresponding tax week.
- For the ‘Number of earnings periods…’, enter the appropriate number.
For employees’ pay and deductions, use the total figures for the month.
HMRC says that when reporting the reason for filing late choose option ‘E’ (if your payroll provides this facility)
Penalty Trap, new employers
If you are a new employer who started to operate PAYE after 6th April 2014, irrespective of the number of employees you have, HMRC said in August that you will not qualify for the time-limited relaxation. More guidance is required from HMRC on this point, following the update below.
The extension was not reported in HMRC's August Employer bulletin or announced in HMRC's 'What's new' and then the links changed when HMRC migrated to its new YouGov website.
RTI: Penalties and appeals
This is our guide to RTI filing deadlines, giving a full summary of the different exemptions/exceptions in filing deadline as well as penalties and appeals.