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According to experts, HM Revenue & Customs, is the main cause of confusion for small companies trying to remain complaint with Real Time Information.

Businesses which have 50 or fewer employees are required to submit real time pay information to HMRC, each time a payroll is processed. Failure to do so results in a £100 penalty, which can soon add up over the course of a year.


One payroll and accounting expert, Stuart Hall, blames some of the reporting failures on poor communication from the tax organisation. One example of lack of communication by HMRC provided by Hall was that the company he represents was blamed by customers when its submissions had not been processed by the system. However, HMRC had made a change to the IT and had failed to inform them that updates were required.

Further concerns have been raised about data accuracy, which is required for the new Universal Credit. Accurate details of earnings are required to ensure correct payments of the new benefit. As Chancellor George Osborne has recently announced that self-assessment tax returns will soon be replaced by digital accounts, experts are raising further concerns about the reliability of HMRC’s IT systems.

Jane Moore, the technical manager for the Institute of Chartered Accountants for England and Wales, described the Chancellor’s announcement that the tax return would be abolished as “optimistic”. According to Moore, people will still need to check information which is entered on their account. She also said that it was likely that deadlines would still exist and penalties would be charged for those who enter incorrect information or fail to meet the deadlines.

What is Real Time Information (RTI)?

Most employers are now expected to submit details of payroll to HMRC electronically, each time a payroll is run. Details of pay, tax and other deductions should be reported to the organisation regularly so that the correct up-to-date information of income is held.

How do I report RTI?

Submissions are made electronically at various times of the month or year, depending on what they are. A Full Payment Submission (FPS) is made each time an employee is paid, either on or before the payment date. This is the most frequently used submission, but others are also employed, including an Employer Payment Summary (EPS) which outlines any adjustments or nil returns.

Penalties are now being charged for failure to comply with RTI. If you would like further guidance, please contact us at The Accountancy Partnership.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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