RTI Submissions & Hours Worked

RTI Submissions & Hours Worked

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Hi there

We have just taken on a client who runs a children's private nursery.

Some employees are only contracted to work during term time ie 43 weeks per year.

Their salary is calculated on an annual basis and they are paid 1/12 each month so they still get paid during the holiday periods.

I am unsure what hours per week/month to record for these employees and how this could possibly affect any tax credit claims?

I have spoken with out software supplier, Sage, who advised they were pretty sure we should record how many hours per week they are contracted to work during term time and not to pro rata but as this information was not part of their guidance and was not in their remit to double check with HMRC. I have tried getting through to HMRC but have given up before I explode at the automated system!

So if an employee is contracted to work 16 hours per week term time do I record 16 hours pw or 13.23 hours pw?

Within Sage you have to record the actual hours worked and do not pick from the bands.

Obviously this could have an impact on an employees benefit payment so we need to ensure we are reporting the correct information.

Many thanks in advance

Replies (11)

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Euan's picture
By Euan MacLennan
14th Oct 2014 11:18

Does it really matter?

With all the problems that HMRC is having with RTI, I am not even sure if the DWP has access to the figures.

I would pro rate - 13.23 hours = band A.

The most correct might be to enter 16 (just into band B) in the months that they are working and 0 (band A) in the months when they are not.

Once again, I am surprised by the way that the Sage Payroll software has been written - what on earth is the point in requiring unnecessary detail to be entered?.

Thanks (2)
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By bookwormmaureen
14th Oct 2014 11:34

Sage

Hi

I use a lot of the sage payroll software for clients and for my own staff and there is another option to putting in actual hours.  Do you use sage payroll or sage one payroll?  I have the same issue with one member of my own staff who is termtime only so I put her wages through as salary at 1/12, then add on additional hours as overtime - this is sageone payroll.

 

For sage payroll you can do the same by adding in a new payment type.

Maureen

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Replying to johnhemming:
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By Kazmc
14th Oct 2014 11:39

?

bookwormmaureen wrote:

Hi

I use a lot of the sage payroll software for clients and for my own staff and there is another option to putting in actual hours.  Do you use sage payroll or sage one payroll?  I have the same issue with one member of my own staff who is termtime only so I put her wages through as salary at 1/12, then add on additional hours as overtime - this is sageone payroll.

 

For sage payroll you can do the same by adding in a new payment type.

Maureen

Hi there

We use Sage 50 Payroll so not sure if that is different?

 

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Replying to Dorcas Walters:
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By Kazmc
14th Oct 2014 11:49

Checked

Kazmc wrote:

bookwormmaureen wrote:

Hi

I use a lot of the sage payroll software for clients and for my own staff and there is another option to putting in actual hours.  Do you use sage payroll or sage one payroll?  I have the same issue with one member of my own staff who is termtime only so I put her wages through as salary at 1/12, then add on additional hours as overtime - this is sageone payroll.

 

For sage payroll you can do the same by adding in a new payment type.

Maureen

Hi there

We use Sage 50 Payroll so not sure if that is different?

 

Have just called Sage helpline and when you enter the hours on Sage 50 you enter the actual hours and do not tick which band the employees fall into

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By Kazmc
14th Oct 2014 11:37

.

Hi Euan

Many thanks as always for taking the time to reply.

I'm pretty sure that the hours are being used for tax credit purposes already as we have had a client contact us as the tax credit office had queried the 'hours worked' she had advised of 40 per week as they had on file 21 hours per week (as we had been reporting on the FPS). She only receives a directors nominal salary so had not thought to advise she had changed her hours.

So it would seem that the information recorded on the FPS is actually filtering through and potentially affecting claims.

 

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By PBH64
14th Oct 2014 11:59

It's for tax credits not DWP

The normal hours worked is the defintion used by Tax Credits

http://www.hmrc.gov.uk/news/rti-hours-worked.htm

Thanks (1)
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By dnicholson
14th Oct 2014 13:05

Sage
@Euan

1. The hours are used by DWP, as posted above. I think hours during the working time would be more appropriate.

2. Aside from the other uses for actual hours above, HMRC did change the bands once. Having the actual number allows the program to set the right band in the filing.

Thanks (1)
David Winch
By David Winch
14th Oct 2014 13:18

I would suggest that you enter the average number of hours for which you are paying the employee, which is 13.23.

My understanding is that where, as here, there is a pattern of working fluctuating hours then entitlements to tax credits and benefits are based on the average hours worked over the cycle (in this case a year).  So that IMHO 13.23 is the figure to be entered for RTI.

David

Thanks (1)
David Winch
By David Winch
14th Oct 2014 13:25

Ooops!

Changed my mind, sorry!

I discover that term time work comes into a special category & is not regarded as fluctuating.

So my previous comment was incorrect.

For a term time worker the hours of work entered should be the average hours worked in term time.  So 16 is the figure to be entered for RTI.

David

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By Kazmc
14th Oct 2014 13:37

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thanks everyone for your time and advice

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By gary.ging
14th Oct 2014 13:58

HMRC advise to use term time hours

Hi Kazmc,

This was a common question leading up to the introduction of RTI for employers in the education sector and the advice from HMRC at the time was that you should base it on the number of hours the employee is normally expected to work during term time, even during the holidays. You should not reduce it during the holiday period.

I have not seen any guidance recently from HMRC that would change that view.

Regards

Gary

Sage (UK) Ltd

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