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RTI submissions and fines

when a client runs a monthly payroll but pays the staff weekly

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This is something I have been suspecting for a while but now I have in writing in an email that the client pays the staff indeed weekly but told us that they pay them monthly.

Now that I have proof, I need to send yet another reminder that this is against RTI rules but i can't find anything about possible fines apart from late filing which is not the case.

Can somebody help? Much appreciated.

Replies (8)

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By Wanderer
28th Jul 2021 15:27

crebourret wrote:

..... which is not the case.

What is you basis for that conclusion?
Doesn't it come under "The expected number of FPSs are not sent for any given period" as outlined here:-
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Replying to Wanderer:
By crebourret
28th Jul 2021 15:27

Just that it is breached of the RTI rules rather than submitting late because of sickness, hospital etc ( I can't remember what was the other excuses listed by HMRC sorry)

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Replying to crebourret:
By Wanderer
28th Jul 2021 15:30

Surely that's just the HMRC list of reasons for an appeal? The expected number of FPSs still haven't been submitted.

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28th Jul 2021 15:52

Doesnt this fall into 2 sections.
Number of FPS's & the way payroll is calculated are two different things.
So your number of FPS's are fine - no penalty due then
BUT the reporting is totally incorrect as we all know that the FPS and reporting should be done everytime a payment is made. So it should be done weekly.
I had one like this and said that should HMRC come knocking they will crawl over everything. In fact they did come knocking on VAT and picked up the incorrect way payroll was being done and it all had to be re written. There was no penalty but the time involved was enormous. That may frighten them into adjusting their ways

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By lionofludesch
28th Jul 2021 16:00

He should be submitting an FPS every time he pays the employees.

Tell him the risks, tell him he can carry on if he wants but he'll have to be doing it himself, because you have professional standards to uphold.

The snag, of course, will be switching from monthly to weekly during a tax year. Will your software permit it?

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By Hugo Fair
28th Jul 2021 16:13

" i can't find anything about possible fines apart from late filing which is not the case."

Yes it is very much the case (if your assumption about what is going on is true) ... as:
* every time they pay staff (weekly or irregularly or whenever) they must file an FPS on or before making that payment;
* when they fail to do this, the missing FPS can be treated as a late filing.

More importantly, when they file a monthly FPS instead, some of the content must be a LIE (e.g. for "payment date" and for "pay frequency" and for "number of earnings periods covered by payment", as well as presumably not entering a "Late PAYE reporting reason").

And the impact on accuracy of reported pay/tax/nics is unquantifiable ... given that we don't know how they're reconciling the fact that there is not an exact number of weeks in each tax month.

Finally, if any of their staff are also claiming UC then the lack of correlation between reported and actual payment dates could be near catastrophic for the individual.

I could go on (statutory pay, holiday pay, pension contributions, etc) but the only relevant question is how definitively you know about the false reporting ... and what you do about it.

The cost of penalties is very much the least of the problems your client will face when this is uncovered - and it will be!

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By SteveHa
29th Jul 2021 15:01

On what basis is he paying them - on a payroll not yet run, or on a payroll already run but not paid?

If the latter, I don't see an issue, he's submitted "on or before" the date of payment.

If the former, then it is, indeed, contrary to RTI rules.

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Replying to SteveHa:
By Hugo Fair
29th Jul 2021 15:40

You're right, as usual we don't know what's actually going on. Could be running payroll weekly and paying staff but not reporting this to HMRC (until a monthly 'catch-up), OR could be paying staff a roughly estimated 'advance' each week but without running a payroll until the monthly run & reporting, OR ...
BTW the 2nd example is one of the scenarios expressly forbidden by HMRC (ever since I pointed out the loophole to them back in the days of the RTI Pilot) ... sorry!

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