RTI 'Late Filing' & paying employees in arrears

RTI 'Late Filing' & paying employees in arrears

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I have a client who runs a bar and calculates and pays the employees on the Friday 2 weeks after the week worked ending on a Sunday, e.g. staff were paid Friday 18th April for w/e Sunday 6th April. It has always been this way and since RTI came in the FPS has always been filed on the Friday that the payments were made to the employees using Moneysoft. They have not received any communication from HMRC that they have filed a late FPS.

However, the first week of the new tax year that the employees have worked, w/e 6th April, was calculated and paid to the employees as normal on Friday 18th April but this time when trying to file the FPS Moneysoft showed a warning that the FPS was being filed late and a reason needed to be chosen. The FPS was cancelled and not filed at that time.

Please could someone provide any advice as to how my client should proceed into this tax year if he is still paying the employees in arrears and still filing and paying HMRC on time according to the payment date to the employees? Is it necessary for him to change the routine and timing that he uses to pay his employees?

Many thanks in advance for any advice that you can give.

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By onicholson
20th Apr 2014 14:02

Date of payment
Using that example, the payslip should be dated 18th April (week 2). If the previous payslip was dated 30th March, you've been using the wrong date on the payslips. Change to the date of payment and continue as normal. The fact that it's a week in arrears is irrelevant to PAYE. The only change this year is the addition of a late reason to the FPS, which Moneysoft is detecting as required based on your payday.

The employees will skip tax week 1, which is fine. HMRC have more detailed guidance for some cases involving NI but, in most cases, the answer is carry on as normal.

As an aside, that first FPS for the year is actually late now. It shouldn't happen in the future, if you are paying on Friday and filing Friday.

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Euan's picture
By Euan MacLennan
22nd Apr 2014 10:24

Something is wrong

Work done in the week to Sunday, 30th March, was presumably paid on Friday, 11th April which is Week 1 of 2014/15.  Work done in w/e Sunday, 6th April, was paid on Friday, 18th April, which is Week 2.

If your client has been entering the Sunday dates as the payment date in Moneysoft, then he has always been calculating PAYE for the wrong tax week and the introduction of RTI merely flushed out this all too common mistake.  Whether or not he received any RTI late filing warnings in 2013/14, every single FPS in 2013/14 would have been late.

Have a look at this recent thread.

As onicholson says, enter the Friday payment date for the next weekly payroll.  The employees will get 2 weeks of tax-free personal allowance against 1 week of earnings, so they will pay less tax and there will be only 51 weeks of earnings in 2014/15, but you have to get it right before late filing penalties start in October 2014.

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By NikkyJJ
22nd Apr 2014 13:17

Thanks

Thank you both for your comments and advice, I have already acted on them and it would appear that the issue will be resolved in the next weeks' payroll as you predicted.

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By Sarah E
12th Mar 2015 18:17

RTI Payments in arrears

 

Can anyone give a definitive answer to paying staff in arrears and reporting RTI - Our payroll software only gives one option for a date which is payroll date which it deems to be pay day . However this is not pay day as pay day is a week later.  This is also the case for some monthly payrolls the payroll is for work done in the Month but pay day might be the 7th of the following month.  Are the revenue stating that the earnings are based on when you are physically paid ? If so paye could be due a month later in this example but technically the paye is due the month after it is earnt ?? Does anyone use the revenues own software does this give you the option of a pay run date and a pay date ? 

Currently the RTI is being reported as late on our software when technically it is not -  as it is prior to the staff being paid on both occasions detailed above.

Have they changed the law as to when earnings are deemed to be made ?

I look forward to an answer that is not  just change the date to pay day

 

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