RTI Question

JodieR

Employer pays two employees on a weekly basis, each of them gets paid approx £90 per week so under LEL, however, on a couple of occasions in 2012/13 the weekly pay exceeded the LEL due to the employees working extra shifts.
When I was at the RTI seminar they said that once an an employee's exceeded the LEL the employer falls under RTI rules and must declare all payments to all employees, but is this 'reset' at the beginning of each tax year? Do you think my client needs to file RTI each week?

Hope someone can help as I really don't want to phone HMRC today!

Dcollins

I spoke to HMRC last week about a client with no employees, and a PAYE scheme that is in the process of being closed. I asked a similar question, as I know the scheme won't be closed for a few weeks. Was told that an FPS needs to be submitted even if there is nothing to report.

So, unless the PAYE scheme was closed before 5th April it looks like you do need to make submissions. But, employers with weekly pay runs can file in a monthly batch. Also, HMRC aren't charging penalties for late submissions this tax year. So you've got time to check it out properly.

Doesn't make a lot of sense does it?

JodieR

I did actually end up calling HMRC after reading a post on accountingweb with lots of conflicting advice, and the advice I got from the helpline was as follows:

• There is no requirement to make any RTI reports if no employees have earned over the LEL (£107 in 13/14) during the year
• If any employee exceeds the LEL in any period, from that point RTI reporting kicks in and all payments made to all employees (even those who’ve never earned over LEL) must be reported until the end of the tax year, at which point the system ‘resets’ and you can stop again until the LEL gets exceeded.
• There is no requirement to set up a payroll scheme for employers who haven’t paid anyone over the LEL.


I double-checked that the man I spoke to was confident this is correct and I've made a note of the date & time of the call, so hopefully nothing will come back to bite me now!!

Newbie

I have read in the ICAEW detailed April helpsheets on RTI that there is an option for directors to be paid in the final month of the tax year and register an annual scheme, however, this detailed information does not appear to have filtered through to accounting web as yet not sure quite why. this is all i could find on the web http://www.tax.org.uk/media_centre/LatestNews-migrated/RTI_annual_payment

groundy

Newbie wrote: »

I have read in the ICAEW detailed April helpsheets on RTI that there is an option for directors to be paid in the final month of the tax year and register an annual scheme, however, this detailed information does not appear to have filtered through to accounting web as yet not sure quite why. this is all i could find on the web http://www.tax.org.uk/media_centre/LatestNews-migrated/RTI_annual_payment

My understanding is that for this to work the director would have to pay themselves that amount in month 12 and therefore is no use to a director who takes the same each month splitting between dividend and salary.

Newbie

Hi I attach the helpsheet re making annual payments, comments welcome on this one............Attachment not found.Attachment not found.

Allan

I have read in the ICAEW detailed April helpsheets on RTI that there is an option for directors to be paid in the final month of the tax year and register an annual scheme

Where was the reference to the final Month of the tax year?

From HMRC:

Annual schemes
If you pay your employees annually in a single tax month, you can ask HMRC to treat your PAYE scheme as an 'annual scheme'. You must first advise HMRC of the month you expect to pay your employees because when an annual scheme is registered they will record which month your FPS is expected to be made. For example, if all your employees are paid in March every year, HMRC will expect an FPS in March - and if this is your only submission for the tax year you must indicate that it is your 'Final submission for the tax year' and answer the end of year declarations and questions. If, in a later tax year, you submit your FPS in a different month, your expected month will be changed by HMRC for future years. Once your business is registered as an annual scheme, you do not need to send in EPS for the other 11 months of the tax year that you make no payments to employees. If you think this might apply to you, contact HMRC's Payment enquiry helpline and have your Accounts Office reference number to hand.

Newbie

If you read the helpsheet attached above it does explain everything quite clearly.

Allan

Indeed it does:

Annual salary payments
The company can pay directors annually. FPS will need to be submitted on or before payment. If the director is paid in final month of the tax year then, as above, the FPS reporting the payment can be combined with the final end of year FPS.

Still a lot of ambiguity around about RTI though and a lot of panic, fingers crossed, no issues for us so far.

Allan

Update on annual schemes if it helps anyone.

http://www.ion.icaew.com/TaxFaculty/26724