HMRC's concession to relax the strict timing of submission under Real-Time Information (RTI) reporting ended in April 2014.

Under RTI employers are required to make:

  • A Full Payment Submission (FPS) electronic submission report to HMRC before they make any payment to employees.
  • An Employer's Payment Summary (EPS) if during a PAYE month an employer makes any statutory payments to HMRC (Statutory Maternity Payments or Sick pay for example) or suffers Construction Industry Sector (CIS) deductions or has not paid anyone.

Under the terms of HMRC’s relaxation arrangements, employers were able to make submissions under RTI when they completed their main payroll run, providing that was on or before the last day of the tax month (5th). This may be after payment to employees has been made.

HMRC extended the relaxation arrangements which would have otherwise ended in October 2013, this meant that employers were not forced to change their payroll operations until the end of the year. In effect 2013/14 was a pilot year for most small businesses.

Exchequer Secretary to the Treasury David Gauke said:

“This is the biggest reform of PAYE since its introduction nearly 70 years ago and we are bringing the system into the 21st century. The transition is going well, and the vast majority of employers are now reporting their PAYE information in real-time, meaning that HMRC’s records are becoming more accurate and up-to-date. DWP is already using the new system to underpin its Universal Credit pilot, helping it to be more responsive to changes in claimants’ income levels. This is all good news, but we will continue to listen to and work with businesses to ensure that all employers are reporting in real-time by April 2014.”

HMRC’s Director General for Personal Tax, Ruth Owen, said:

“The roll-out continues to exceed our expectations. I am delighted that 83 per cent of SMEs and 77 per cent of the smallest businesses are already on board. We will now write to the minority of employers who are not, to establish how we can help them meet the requirements of reporting in real-time.”

The Chartered Institute of Taxation (CIOT) welcomed the announcement. Colin Ben-Nathan, Chairman of the CIOT’s Employment Taxes Sub-Committee, commented:

“On or before reporting’ has been a significant concern for small employers. This announcement is good news and shows that HMRC has continued to listen to the concerns of small employers, their agents and the organisations that represent them. It will help small employers continue to engage positively with RTI and to keep the costs of RTI reporting to a minimum.”

Colin Ben-Nathan added:

“This extension of the relaxation to April 2014 is very sensible. It will provide more time for the necessary research into whether permanent changes need to be made to the RTI process to take account of the needs of the smallest employers. The CIOT is keen to work with HMRC on this to ensure that unnecessary costs are not imposed on these employers.”