Employer paying wages early - RTI issue?

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Weve just prepared the accounts for a client and noticed that the client pays their staff early sometimes!  Pay date is 25th of every month and the RTI return is filed on the 25th or the Friday if its a weekend.  Is there an issue as the RTI return hasnt been filed "on or before" the payment has been made?  I remember reading that there was an issue with Universal Credit and that if you submitted an RTI early it could affect someones entitlement as it would calculate a higher average pay!

Spoke to the client about it and they said it just depends on when they have the time to do it, they would rather pay early than late!  I suggested scheduling the payments so they came out on the 25th but they dont trust that apparently!  Do we have any options? Salaries are typically the same every month. Ideally I would just like to file all RTIs on the same date if possible and no doubt the client wont always tell us when they make the payment anyway!  

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By Paul Crowley
21st Jul 2022 14:41

Ignore the problem
HMRC have said do not muck about with usual pay day because of universal credit every December
The submission before pay rule has effectively been over ridden to suit HMRC, making compliance now somewhat irrelevant

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By tom123
21st Jul 2022 15:07

I would report the same date with RTI.

We have some UC claimants who must have started their claims on 26th - which is our pay day.

If we ever pay on a Friday 25th, we still date the RTI 26th or it stops their claims.

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By lionofludesch
21st Jul 2022 17:11

Unlikely to be an issue with HMRC at a control visit but it's worthwhile pointing out to the client that it is he who takes the risk.

Just in case he gets some zealot visiting.

If he gets a penalty, at least you warned him!

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By Hugo Fair
21st Jul 2022 17:40

There are two factors mentioned by OP - the HMRC perspective (filing on or before payment), and the DWP/UC perspective (allocating the payment within a claimant's schedule of 4-weekly claim periods).
And the goodish news is that they both use the same data item from the FPS - namely 'payment date'.

This is NOT always the same as the actual date of payment (don't you just love HMRC) ... it should be reported as the regular contractual date on which payment is due (often but not always the same thing as actual payment).
It's too long a saga to explain here in detail, but the most common example is where say the contractual day is 25th of each month but employer pays staff early on 20th Dec - in which case you are meant to still report payment date as 25th.

And the relevance to OP?
The HMRC 'on or before' rule simply compares that reported date with the physical date of submission to determine success or otherwise of compliance.
Whereas UC uses the regular date to avoid placing the payment in the wrong claim period - or at least it tries to do so but often still needs human intervention!

NOTE: All the above examples are predicated on the situation described by OP (in particular all staff on a regular monthly salary) ... if there were any staff on variable hours, or worse paid at irregular intervals, then you would really need to get a much tighter grip on payroll processing schedules (for other reasons as well).

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