Payroll Compliance

    Payroll Compliance: RTI Submission Essentials

    Master Real Time Information (RTI) submissions to HMRC. Understanding FPS, EPS, deadlines, and avoiding common payroll compliance penalties.

    December 5, 2024•5 min read

    What is Real Time Information (RTI)?

    Real Time Information (RTI) is HMRC's system for collecting PAYE information in real-time from employers. Instead of annual reporting, employers must submit payroll information to HMRC on or before each payday.

    This system allows HMRC to track tax and National Insurance contributions in real-time, helps ensure employees pay the correct tax, and enables faster processing of tax credits and benefits.

    2013

    RTI Introduced

    1.5m+

    UK Employers Using RTI

    £100+

    Monthly Penalty for Late Submission

    Types of RTI Submissions

    Understanding the two main RTI submission types

    Full Payment Submission (FPS)

    On or before each payday

    Information Included:

    • Employee earnings
    • Tax deducted
    • National Insurance
    • Student loan deductions
    • Pension contributions

    Employer Payment Summary (EPS)

    By 19th of the tax month (if applicable)

    Information Included:

    • Statutory payments recovery
    • CIS deductions
    • Apprenticeship Levy
    • Employment Allowance

    Common Payroll Compliance Mistakes

    Avoid these costly errors in your payroll processing

    Late FPS Submissions

    Impact:

    £100-£400 per month penalty

    Solution:

    Set up automatic reminders and submit payroll early

    Incorrect PAYE Codes

    Impact:

    Under/over-deduction of tax, employee complaints

    Solution:

    Update tax codes promptly when notified by HMRC

    Missing Student Loan Deductions

    Impact:

    Penalties and backdated recovery required

    Solution:

    Verify student loan status for all new starters

    Incorrect Pension Auto-Enrolment

    Impact:

    TPR penalties up to £10,000 per day

    Solution:

    Properly assess eligibility and apply correct contribution rates

    Wrong National Insurance Categories

    Impact:

    Incorrect NI calculations and potential underpayment

    Solution:

    Understand NI category letters and apply correctly

    Failure to Submit EPS

    Impact:

    Overpayment demands from HMRC

    Solution:

    Submit EPS when claiming statutory payments or allowances

    Payroll Compliance Checklist

    Essential steps to maintain payroll compliance

    Register as an employer with HMRC before first payday
    Choose compliant payroll software for RTI submissions
    Obtain correct tax codes for all employees
    Check right to work documents for all employees
    Set up workplace pension scheme if required
    Keep accurate payroll records for at least 3 years
    Submit FPS on or before each payday
    Pay HMRC by the 22nd (online) or 19th (cheque) of each month
    Issue P60s to employees by 31st May each year
    Provide P45s to leavers within their final pay period
    Complete end-of-year payroll tasks by 19th April

    RTI Late Filing Penalties

    Penalty Structure

    1-9 employees: £100 per month for late FPS submissions

    10-49 employees: £200 per month

    50-249 employees: £300 per month

    250+ employees: £400 per month

    Additional Penalties

    • •Repeated late submissions in a tax year may result in quarterly penalties
    • •Incorrect information can lead to penalties of up to £3,000 per error
    • •Failure to maintain records: penalties up to £3,000

    Need Help with Payroll Compliance?

    Our payroll specialists ensure accurate, compliant RTI submissions every time, giving you peace of mind and avoiding costly penalties.