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Improved RTI Reporting
HMRC has made changes to its RTI employer payment summaries (EPSs). When and how might these affect your company’s PAYE reports?
RTI troubles. One of the biggest bugbears employers have with RTI is tying up HMRC’s records of PAYE tax, CIS deductions and NI with their own. HMRC has largely blamed inaccurate reporting by employers as the cause of discrepancies, but the truth is that much of the difficulty is due to HMRC’s delays in updating its online records and flaws in the RTI reporting process. The good news for employers is that HMRC has finally listened and made one or two improvements.
EPS reporting. Employer payment summaries (EPSs) can be used to adjust figures you’ve already reported to HMRC on a full payment submission (FPS); for example, when you make a statutory payment, e.g. maternity pay, to an employee. Until the latest change you couldn’t specify how the adjustment should be allocated, HMRC simply applied an EPS to the most recent FPS. This often caused a mismatch between HMRC’s and the employer’s records.
Tax month indicator. A tax month indicator has been added to EPS reports. Payroll software providers, including HMRC, are updating their programs to include the new indicator. This will allow you to show which tax month HMRC should allocate an EPS to.
Tip. To make use of the new indicator you’ll have to first run program updates sent to you by your software provider. Unfortunately, it may be a while before some of them make the change.
No PAYE or CIS activity. Where you don’t expect to make payments that need to be reported to HMRC through RTI, you can send an EPS indicating the number of months you expect the situation to continue. Previously the maximum number this could apply to was six; with immediate effect HMRC has increased this to twelve.
Tip. Where you’ve indicated a period of inactivity using an EPS, but unexpectedly make a payment, submit an FPS with the payment details and then reinstate the period of inactivity by sending another EPS.
If you need to amend a full payment summary for an earlier month using an EPS, you can now indicate which month it applies to. But to use this facility you’ll have to wait until your software provider updates its program.
Please give us a call if you would like further information or advice.
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