Written by James Kitching
Published on October 16, 2013

With the introduction of RTI the payroll year-end procedure has changed, slightly. 

Part of RTI meant that the year-end procedure has been stretched throughout the year, instead of making one P35 submission and P14’s submission before the 19th of May. Full Payment submissions and Employer Payment submissions must be made throughout the year.

Full Payment submission - This submission is sent every time an employee is paid, so if the payroll is weekly this submission will be sent weekly. This must be on or before pay-date. The file contains information such as Gross pay, Tax and national insurance contributions broken down by each employee.

It will also incorporate employee details such as, address, hours worked a week and tax codes. This file gives HMRC a correct amount that is due by the 19th of the following month, it also builds up the final amount due at the end of the tax year. This effectively becomes the P35 and P14’s.

Employer payment summary - This submission is not needed for all payrolls, it is only need when one of the following occurs:

  • No employees are being paid within a pay period
  • When you are entitled to recover statutory payments
  • Construction Industry scheme deduction suffered
  • Or you operate NIC’s holiday scheme

This submission will contain the appropriate figures to reduce or increase the amount the company owes to HMRC in that tax period. This will also build up and be included in your year-end figures.
Payments should be made each month to match these submissions or HMRC will be hot on the case now that they have your information in real time and not yearly.

The final file sent to HMRC should be completed on or before the final paydate of the tax year, the file notify HMRC about the final submission should be the latest submission, being the FPS or EPS.

P60’s - P60’s still need to be distributed to all current employees by the 31st of May, the process on this has not changed. Although it should be considered to look at the online eP60 option as a quicker way to distribute these documents.

RTI fines - HMRC want employers to file on time rather than issuing penalties, employers will not be charged in 2013/14 for late submission of an FPS file unless it is the final one for the tax year. Penalties are calculated on the basis of £100 per 50 employees and accrue each month that the return remains outstanding after 19th of May. Although HMRC will apply a risk based approach to identify employers who may be submitting incorrect returns, and there may be circumstances that penalties are issued.

However from 2014/15 tax year new late filing penalties will apply to returns due from employers. Situations that will incur a penalty are as follows:

  • Where information isn’t received as expected on an FPS
  • You have not told HMRC that no employees have been paid in a tax period by sending an EPS
  • Late filing

The charges will be as follows:
Number of employees on PAYE scheme Amount of the monthly filing penalty
1 - 9 - £100
10 - 49 - £200
50 - 249 - £300
250 or more - £400

Penalties will be issued quarterly where appropriate in July, October, January and April, the penalty will tell you the amount that is due, how to pay and when it is due by.