Real Time Information (RTI)
REAL TIME INFORMATION
WHAT IT MEANS TO YOU
1. An employer is required to inform HMRC electronically every time an employee is paid, as to the salary and tax deductions ie weekly, fortnightly, 4-weekly or monthly. This includes employees who earn more than the lower earnings threshold (LEL) of £109 per week but where no tax or national insurance is payable.
2. The submission known as an FPS (Full Payment Submission) must be made on or before the date the salary is paid or the employer may be liable to penalties. This means weekly paid employees need 52 submissions per annum and monthly employees 12 submissions per annum.
3. When the information is submitted HMRC will be matching the payroll data to information they have on file for the employee(s).
What Taxing Nannies do to assist compliance
1. Taxing Nannies are dealing with all FPS submissions on behalf of our clients. We are strongly recommending to all our clients that they consider paying their employees monthly where possible.
2. Paying monthly reduces the number of submissions that need to be made to HMRC and hence reduces potential penalties. It gives clients more lead time to get information to us and fees are cheaper than if paying employees weekly.(see below).
3. We now email payslips rather than posting to give our clients more time to respond with any changes that need to be made to pay details.
4. We operate on a very strict timetable – we email payslips where possible, no later than 5 working days prior to the due date for salary payment although where the employees are monthly paid, the lead time is often far greater.
5. If we do not hear back from our clients within 4 working days of the due date for payment of salary to the employee(s), we assume that the pay details are correct and this acts as automatic authority to file the RTI submissions.
6. Clients who pay their employees a salary that varies from month to month should talk to us as to the best way to proceed.
7. Matching of data by HMRC is crucial to the working of RTI. HMRC can reject submissions where they cannot match the employees’ details and HMRC also now require information regarding contractual hours worked.
What you need to do
1. Provide us with an email address that we can email payslips to and that you guarantee to check regularly.
2. Consider paying your nanny monthly.
3. Ensure that you advise us immediately of any changes to payroll details, and comply with the timetable of a maximum of 4 working days prior to the salary payment date.