HMRC confirms monthly RTI respite

HMRC will ease Real Time Information (RTI) reporting deadlines for small businesses with fewer than 50 employees that pay their staff weekly or more regularly.

Until 5 October, small employers who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run, but no later than the end of the tax month (5th). 

Earlier this morning, the tax department announced: “HM Revenue & Customs recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for small businesses.

"HMRC will continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses and consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI or the success of the Department for Work & Pension's Universal Credit."

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Comments

Errrrrrrr    1 thanks

neiltonks | | Permalink

So this just covers cases where people are paid weekly but the payroll is only processed monthly, and only until October? Not that much of an easement. And we now have another 6 months of uncertainty as we wait to see what else happens in October when HMRC have consulted yet again!

RebeccaBenneyworth's picture

the welcome benefit    1 thanks

RebeccaBenneyworth | | Permalink

This is very welcome indeed and allows smaller employers to start reporting under RTI without increasing the number of payroll runs that they currently make. There are a number of issues for smaller employers with the on or before rule, in particular where advances against wages are paid weekly and deducted from the monthly payroll; this is a common way to transition from weekly paid to monthly paid. These employers will not now have to go back to weekly payroll runs, while HMRC and the bodies involved have time to look at the rea limpact of these issues and how monthly reporting might affect universal credit. We need a workable solution for both employers and UC claimants - and we are hoping that we can find one!

Thanks for nothing    5 thanks

david hollister | | Permalink

Having now prepared each of my 24 employer clients for RTI, persuaded several of the 'weekly payers' to 'go monthly', purchased, learned and set up the requisite software, and now reading that this is only a transitional relief, my comment is simply 'thanks for nothing'. Just delaying the inevitable. I for one am biting the bullet on 6th April 2013. 

I am doing so in the knowledge that I will eventually have to comply with all their stupid regulations, and cynically wondering whether the whole RTi system will eventually fall flat on its face. But in their defence, I have to say that the Revenue have actually made the SA system, the CIS system, and the online PAYE system work tolerably well so let's live in hope........

I for one don't remember voting for this...... and neither can any of my clients who have been obliged to pay my fees for the RTi work I have done so far for them. 

 

 

 

 

daveforbes's picture

clarification

daveforbes | | Permalink

If you pay weekly you would normally be sending in 4 or 5 FPS per month and they must be sent on or before payment.

Are they saying

1. You can send a "monthly total" FPS

or

2. You have until the end of the month to send the 4 or 5 FPSs

frustratedwithhmrc's picture

HMRC faces reality at the 11th hour    4 thanks

frustratedwithhmrc | | Permalink

I agree with Penny that this is a welcome U-turn from HMRC, but feel utter contempt for HMRC with the lateness of the hour.

We're now 2-weeks away from the commencement of RTI, so that those professionals that have gone to a great deal of time and effort to get their clients in a position to work with RTI now look like idiots.

A great deal of time and effort that could have been saved by listening to the community and institutions earlier has been wasted.

Expect that October date to slip as well, but we won't be told about it until September 20th no doubt.

Typical incompetence from both HMRC and the UK government.

daveforbes's picture

to me

daveforbes | | Permalink

It sounds like 2 ... and as there were to be no penalties for late filing this year ....

Confused...

Kazmc | | Permalink

Oh I've read it that if you run a monthly payroll but actually physically pay the employees on a weekly basis then you can continue doing this until October... Am I completely wrong??

Euan MacLennan's picture

Politics-speak

Euan MacLennan | | Permalink

"This morning an HMRC spokesperson told AccountingWEB that a report in Payroll World on the change was accurate and that an official HMRC announcement would follow."

This is like the Downing Street press office handing out in the morning the transcript of a speech that the Prime Minister is going to give in the afternoon.  Let's wait and see the official announcement.

How are the payroll software providers supposed to make this work a couple of weeks before it goes live?

RebeccaBenneyworth's picture

clarification

RebeccaBenneyworth | | Permalink

If you run a weekly payroll then you will report weekly as the FPS process is really an extension of running the payroll. If you do run payroll weekly this announcement probably won't affect you. It is mainly aimed at those who now run payroll monthly but were facing a change to comply with on or before (OOB). Some employers were looking at moving from monthly over to weekly to try to meet OOB and this represents a real increase in burdens. The announcement is late because a lot of work has had to go in to justify this change, and HMRC and minsters needed to be convinced that this was absolutely essential. Work starts now (OK next week) on looking for a permanent solution that won't increase burdens on smaller businesses but will give DWP the data they need to run Universal Credit.
So in summary, monthly reporting is only a fall back where employers cannot meet on or before. You should continue to report under RTI when you run the payroll. I hope that's clear.

daveforbes's picture

@euan

daveforbes | | Permalink

The link at the top of the article is to http://www.hmrc.gov.uk/news/rti-small-businesses.htm

From what I can see there is no change for developers required.

This is also a useful link for when to report

sarah douglas | | Permalink

http://www.hmrc.gov.uk/payerti/reporting/when-to-report.htm#3

 

Kindest Regards Sarah Douglas. Douglas Accountancy and Bookkeeping Services. 

The Article below from HM Website Latest News

sarah douglas | | Permalink

 

Reporting PAYE in real time (Real Time Information or RTI): relaxation of reporting arrangements for small businesses

HM Revenue & Customs (HMRC) recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for small businesses. 

Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th). 

HMRC will continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses and consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI or the success of the Department for Work & Pension's Universal Credit.

Please see HMRC's guidance on exceptions to reporting PAYE information 'on or before' paying an employee.

John Stokdyk's picture

@Euan - attempts to manage the message

John Stokdyk | | Permalink

Just to explain the disappearing Payroll World reference that you mention in your comment....

From what I understand the agreement was reached yesterday, but as is usual with these sorts of announcements the parties involved leave it to HMRC to make the first announcement.

It seems our colleagues at Payroll World got wind of it before the official announcement at 11am this morning and for the initial report Robert based our information on what they said. 

Once we had our own sources for the same story, we switched some of the copy around to reflect the comments we picked up independently.

RTI

andystopps | | Permalink

My exact reaction as well. I have read it as being the second option, but I'm still not totally sure.

mr. mischief's picture

It's great news!    6 thanks

mr. mischief | | Permalink

I see this as most probably the first back-track of many over the next six months as the new system collapses around their ears.

As a profeession, now the door is open we must keep our foot in it and press hard.  As the months go by and we discover unexpected glitches - which there will be - we need to be getting more of these concessions where needed.

 

thacca's picture

universal credits    1 thanks

thacca | | Permalink

I assume the exact date of payment won't effect the amount of universal credit some one will receive but the weekly or monthly amount. Surely therefore it is only necessary that payments are reported by the end of the relevant week/month for it to operate correctly.

petersaxton's picture

Timing    1 thanks

petersaxton | | Permalink

thacca wrote:
I assume the exact date of payment won't effect the amount of universal credit some one will receive but the weekly or monthly amount. Surely therefore it is only necessary that payments are reported by the end of the relevant week/month for it to operate correctly.

I suppose giving people any leeway will increase the opportunity for confusion.

Don't we need to change periods from the 5th to the end of the month/year?

Would it really be that big a problem to have periods in calendar months and the tax year end for personal tax as 31 March?

Or even 31 December with the deadline moved from 31 January to 31 October? This would stop any confusion caused when people say 2012 and some mean 2011-2012 and others mean 2012-2013.

It may give accountants a more relaxing Christmas and New Year, too!

Euan MacLennan's picture

Calendar years & months

Euan MacLennan | | Permalink

I completely agree with Peter.

Beyond the scope of the introduction of RTI, but it would be so much easier if we could fall in line with the rest of the world and use calendar years and months for income tax, including NIC, purposes.

Euan MacLennan's picture

Dave Forbes

Euan MacLennan | | Permalink

daveforbes wrote:

The link at the top of the article is to http://www.hmrc.gov.uk/news/rti-small-businesses.htm

From what I can see there is no change for developers required.

Yes - I see now that the concession only extends to monthly payrolls with advances paid during the month.  So, no question of stacking up 4 or 5 weekly FPSs and filing them in one dollop by the 5th.

The problem is that the concession only applies for 6 months.  Either the few employers who benefit from this concession will have to wean their employees off (weekly) advances in the next 6 months or they will have to switch from monthly to weekly payrolls halfway through 2013/14.

Easement

NYB | | Permalink

Quite.

NeilSeekings's picture

First of the many twists and turns to come, Are we suprised

NeilSeekings | | Permalink

We should not be surprised by this as it will be one of many to come. We are still getting updates on a regular basis though none as yet that cause the need to change software functionality or development but mainly clarification notices regarding interpretation of requirements. One of the reasons we left RTI development as late as we could.

Neil Seekings

MyPAYE 

Judging from past experience ...

Buzby | | Permalink

Judging from decades of experience, I would be inclined to agree with Mr Mischief and Neil Seekings. 

I understand HMRC's rationale behind RTI but what should work in theory differs substantially to that which happens in reality.  Both under the current system and when things were submitted manually, whether PAYE/NIC; SA or Corporation Tax related, how many of you have had letters from HMRC which were totally incorrect?  Have any of you ever known HMRC to misallocate payments?  If your answer to either of these is "yes" then how long did HMRC take to rectify their errors?  How many letters did you have to write?  How many times have you received Final Demands and interest charges for money that wasn't owing?  Have any of you received a Summons?  Has HMRC's inability to read and absorb your correspondence resulted in inspections?  I have had issues such as these perpetuate for years!

Apart from the apparent additional adminstrative burden which RTI imposes on employers I am of the opinion, certainly over the medium term, that employers and employees are in fact going to be further disadvantaged, financially i.e..  I am in no doubt that the private sector will simply be forced to bear with HMRC whilst it comes to grips with the ramifications its 'creation'! 

Easy RTI

jeffcoe | | Permalink

Why 'o why do the Inland Revenue just ask for submission of Real Time Information on the same basis as the payment of PAYE/NIC.

Namely that you must report all information, either for montly or weekly employee's by the 19th of the month following payment.

This would help all employers including those who make "Cash" payments as it would give them time to update and submit records.

Surely this would also help the Revenue as they would receive 12 submissions as opposed to 52 and still the information would be available to the DWP!

frustratedwithhmrc's picture

RTI - It's all in the name...

frustratedwithhmrc | | Permalink

jeffcoe wrote:
Why 'o why do the Inland Revenue just ask for submission of Real Time Information on the same basis as the payment of PAYE/NIC. Namely that you must report all information, either for monthly or weekly employee's by the 19th of the month following payment.

Probably because it would make a mockery of the "RT" (Real Time) component of "RTI" (Real Time Information)

I fundamentally agree that the submission of PAYE details electronically whenever a payment is run is a step in the right direction.

I just disagree that it should be applied to everyone from day one (i.e. "Big Bang")

petersaxton's picture

Is the name important?

petersaxton | | Permalink

Change the name if it makes more sense to make submissions and use that information on a monthly basis!

frustratedwithhmrc's picture

Really...

frustratedwithhmrc | | Permalink

petersaxton wrote:
Change the name if it makes more sense to make submissions and use that information on a monthly basis!

At the end of the day, the real purpose of "RTI" is as a political football to the DWP reforms.

You don't change the name of a political football, even if all the scores are own goals.

Let's all make monthly returns!    1 thanks

Briar | | Permalink

Whether or not I have weekly paid employees and possibly some monthly paid employees (directors?), I am now going to file monthly Returns in the hope that the concession (sic) will be extended after October. If we all do it, that might force their hand. As Mr Mischief says , lets keep our foot in the door - nay, let's give it a good kicking!

petersaxton's picture

Universal credits

petersaxton | | Permalink

I can't see it being logical to monitor the self employed - I know RTI isn't about the self employed but it is about universal credit which includes the self employed - on a monthly basis.

The all concept of benefits is wrong. We seem to be tweaking income using a great deal of administration to ensure that people can have a reasonable life even if they don't work. The extra money has to come from somewhere. This means the well off and/or hard working. These people will eventually decide there are other countries that will give them a better life.

Benefits should be a safety net for the seriously disabled and people like that not for people to make a lifestyle choice.

No Analysis !!!

Peter Tucker | | Permalink

The fact that HMRC senior management noted the actual operation of PAYE /. Payroll just days before the mandatory implementation of a major change would seem to show that there was no proper analysis of RTI.
Unfortunately Ruth Owen is one of a series of HMRC managers and therefore the attribution of responsibility for cost, wasted resources and general failure, is again avoided.
As Ms Homer mentioned on BBC Breakfast recently, "we don't aspire for 10 out of 10" . Not a motto to which many organisations would subscribe ??

mr. mischief's picture

New motto

mr. mischief | | Permalink

Can I suggest to Ms. Homer the new strapline:

"HMRC - we aspire for 2 out of 10!"

Because in the HMRC phone survey last week I awarded them 1 out of 10 overall, I was feeling unusully generous and full of the joys of spring that day or it would have been worse.

Universal Credit to be linked to RTI ?? ??

Paul520785 | | Permalink

Thinking of the wider picture there are some areas which have I have not yet spotted in these discussions -

The RTI information is, we are told, going to feed information to a Universal Credit system.  This UC system will also require input from claimants like freinds and neighbours which include disabilities like blindness and being in the remote country side without phone lines let alone broadband.  So my simple mind thinks that the RTI "back steps" may appear to be inconsequential compared with the UC issues in the pipeline.

When are the UC instructions to be sent out by DWP - 2 weeks before comes into force is a little late unless the UC does not start until 2014! I do hope I have missed something!

I wonder which idiot within the government is going to get a rise instead of being fired for creating expensive problems by not researching the processes realistically/sufficiently and who will provide support to UC claimants - which professional body can they join to put their case and gain support?

Having gained the nickname of Chief Cynic years ago history has proved proved the cynic right too often.