One of the most frequently asked questions about RTI on AccountingWEB is what will happen under the new system to small companies that only have directors with no PAYE/NI to pay, but who receive a small monthly salary.
“Are they really going to have to submit their payroll every month under RTI,” asked [email protected] in November.
In reply, 12Pay’s Tom McClelland came up with a succinct summary of the situation: “If the company has no employees above the LEL in any week, *and* P46s are held for all employees with boxes ‘A’ or ‘B’ ticked (ie you have a declaration from them that this is their only job), then you don't need a PAYE scheme.
“The moment a single employee exceeds the LEL in any week, or a single employee ticks box ‘C’ on their P46 or refuses to tick any of the P46 boxes, you must have a PAYE scheme and report all employees, regardless of pay levels, to HMRC. This is already the case.
“From April 2013 the reporting will be a full payment submission (FPS) for everyone on every payment if the employer has a PAYE scheme. You won't need to think about the status of employees once you've got a PAYE scheme; just pay them all the same way, and (I guess) whatever payroll solution you use will file them all.”
Since then, similar questions have continued to roll in. To try and bring calm to the situation, this “RTI troublespots” article examines the practicalities for directors under RTI and addresses some of the points raised so far.
More RTI resources
- Real Time Information checklist
- RTI: What you need to know
- The nuts and bolts of RTI
- Prepare your payroll team now
- CIPP guide to RTI: Your first submission
- HMRC RTI homepage
- HMRC: Get ready for RTI
- HMRC FAQs
- HMRC data quality homepage
- HMRC RTI webinar
Rebecca Benneyworth is lecturing throughout February and March on ‘RTI and other PAYE issues’ as part of the Tolley CPD Seminars programme. Further articles will follow based on troublespots raised at her talks and on AccountingWEB’s Any Answers page.
About Rebecca Benneyworth
Rebecca trained in London with Kidsons and, on qualifying, spent some time as Chief Accountant of a manufacturing company. She now has her own small practice in Gloucestershire that comprises of owner managed businesses and small companies.
She also lectures extensively for a range of professional bodies, accountancy firms, commercial organisations and the Inland Revenue. Demand has grown for Rebecca on the lecture circuit where she is well known for her refreshing, enthusiastic and entertaining presentation style as well as having a practical and down-to-earth approach to tax.