I just want to clarify what the relaxation of the RTI rules recently announced by HMRC actually means for employers.  Some of the press coverage of this is slightly misleading and this has left some employers believing they do not have to make any RTI submissions until October.  This is not the case and RTI will still start as planned for most employers on 6 April 2013.

The only relaxation relates to the timing of the RTI submissions for some employers under certain circumstances.  Under RTI the Full Payments Submission (FPS) was due to be submitted to HMRC on or before the payment is made to the employee.  It is the “on or before payment” rule that has been relaxed for those employers that process their payroll monthly but pay employees more frequently.  RTI submissions are still required but are now only required monthly (by the 5th of the month) rather than each time an employee is paid.

Here is what HMRC said:

“HM Revenue & Customs (HMRC) recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time. HMRC have therefore agreed a relaxation of reporting arrangements for small businesses. 

Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).”

HMRC have realised some employers may struggle with the “on or before payment” rule and will be consulting on how they might make this easier for those employers over the next six months.  Its worth noting that it is the Department for Work and Pensions (DWP) who are pushing for the information to be submitted “on or before payment” in order to assist them with the new Universal Tax Credits which are being introduced in October 2013.  It is therefore not a coincidence that this is also the date the relaxation ends.

If you are an employer that falls within this category I would spend the next 6 months adjusting the timing of and the way in which you process your payroll to make sure that you will be able to comply with the rules when the relaxation finishes.  However no penalties will be charged in either case until 2014.

If you have any RTI related questions please do not hesitate to get in touch.