Regulation update: HMRC reporting

Posted on 11 Mar 2013 by The Manufacturer

Are manufacturer’s prepared to operate under HMRC’s new real time information systems for employee pay, PAYE and national insurance reporting? Rebecca Mullins, payroll consulting lead at Deloitte looks at what compliance requires.

In April HMRC enters the final stage of the Real Time Information (RTI) implementation.

Put simply, RTI is a new system for reporting to HMRC, employee pay, PAYE, national insurance contributions (NIC) and other prescribed details. Rather than submit these details at the end of the tax year, through a P35/P14 return, employers will be required to submit the data to HMRC every time a payment is made to the employee or the employer remits the tax and NIC to HMRC.

All employers will be required to be live on RTI by September 2013.

As the final employers go live between April and September, the focus is now on how to process the submissions in a business as usual situation. For many manufactures this will involve changing their current processes and procedures:

New joiners

With the removal of the P46 form, if a new joiner does not submit a P45 how will the employee answer the questions which were formerly on the P46? How will the payroll department determine the tax code to be operated? Many Manufacturers are updating their new joiner forms to include the questions which were previously on the P46.

Completeness of employee records

All employee data will need to be set up correctly before their first payment. No longer will payroll administrators be able to set up partial records just to be able to pay the employee and complete the record at a later date. For a weekly payroll this will mean there is a very short window to collect all the required details from an employee. If the RTI submission file does not contain the required data for an employee the whole file will be rejected!

“All employers will be required to be live on RTI by September 2013”


Submission of timesheets

For positively paid employees in receipt of Universal Credits (UC), if they do not submit all of their timesheets in a month and instead submit more the following month, this will have an impact on the amount of UC they receive each month.

This is because the RTI data submitted to HMRC is shared with DWP who will be able to calculate employee UC in real time. Employees and the payroll team will need to be made aware of this change and ensure that communications are issued soemployees know how and when to submit their timesheets and the implications of missing the cut off date.

Submission of RTI files

This new activity will need to be added to the current Payroll processing schedule. The payroll department will need to determine who is going to create, review, approve and submit the returns and then deal with any queries from employees or the HMRC.


RTI will give the HMRC greater transparency of what is being paid to employees; as all earnings are being reported, not just those which are subject to PAYE and NICs. Manufacturers will need to ensure they have current dispensations from the HMRC for all payments made which they do not subject to PAYE and/or NIC.

Employers who set up cross function project teams to manage the implementation of RTI are encouraged not to disband these teams once they are live, but continue working together to ensure that the business as usual operations have been thought through, documented and put into practice.