RTI explained
Real Time Information (RTI) is the system by which employers notify HMRC about payments made to employees. Under the old system, employers submitted a single year-end return (the P35) covering all payroll activity for the whole year. RTI replaced this with regular online submissions made on or before each pay day, whether employees are paid daily, weekly, fortnightly, monthly, or at any other interval.
The key change is timing: instead of one big report every April, HMRC now receives a submission every time payroll is run. This gives HMRC a near-real-time picture of what each employee has earned and had deducted.
Why was RTI introduced?
RTI was designed to make the PAYE process simpler and more accurate for everyone. The specific goals were to:
- Reduce the number of incorrect tax coding notices issued to employees
- Allow HMRC to identify and chase late payment of PAYE more effectively
- Support the government's Universal Credit programme by providing real-time earnings data
- Remove the stress and administrative burden of the old year-end P35 return
RTI was also introduced in parallel with Universal Credit, the single welfare payment that replaced a range of benefits. Having accurate, up-to-date earnings data feeds directly into calculating Universal Credit entitlements.
What RTI means for employers
Under RTI, all employers must submit a Full Payment Submission (FPS) to HMRC on or before each pay day. This submission contains details of every employee paid in that period, including their pay, tax deductions, and National Insurance contributions.
If no employees were paid in a given period, employers must either submit an Employer Payment Summary (EPS) to tell HMRC that, or confirm they have no employees to report.
RTI data must be submitted electronically. It is no longer possible to manually enter payroll data into the HMRC website. Employers must use compatible payroll software. Gillespie's payroll system is RTI-ready and our support team will identify and resolve any submission issues quickly.
Getting ready for RTI: a practical checklist
- Check your payroll software: ensure it is RTI-compatible and can submit Full Payment Submissions electronically to HMRC
- Verify employee records: RTI submissions are matched against HMRC records, so names, National Insurance numbers, and dates of birth must be accurate
- Review your payroll processes: submissions must be made on or before each pay day, not after
- Conduct an RTI data check: our team can review your employee records to detect and correct all possible discrepancies before they cause problems
How Gillespie's can help
Our dedicated payroll team at our Leith office, headed by Gaelle Malarde, handles RTI compliance for employer clients of all sizes. We run your payroll, make all required submissions to HMRC on time, and deal with any queries or errors that arise. If RTI compliance feels complex or time-consuming, running your payroll in-house may not be the most efficient use of your time.