What is RTI? How to get your RTI submissions right

Your business is blooming and you’ve reached a point in your journey where employees are a necessity for your operation. Congratulations! Now it’s time to get your head around what having employees on a payroll means for your HMRC obligations.

Hiring employees entails a commitment to HMRC that you will provide details of real-time information (RTI). RTI refers to a process implemented and enforced by HMRC that requires employers to submit their pay information in real-time.

This guide will look at everything you need to know about RTI, including what it is, what it involves and how to send your RTI submissions.

What is RTI?

Real-time information – or RTI – requires employers to send information to HMRC every time they pay their employees, rather than waiting until the end of the year. It was first introduced for business owners in April 2013.

There are two types of RTI submissions that you need to make as an employer – a Full Payment Submission and an Employer Payment Summary.

A Full Payment Submission – or FPS – is a monthly report every employer must send to HMRC detailing payments made to employees and any deductions made (visit our guide to calculating payroll if working this out is something you need help with).

If you run a PAYE payroll, the FPS must include every employee on this payroll, including short-term employees and those who earn less than £120 per week. This allows HMRC to keep up to date with your payroll and your employees’ details, and your business’s tax and National Insurance contributions.

UK employers should also use an Employer Payment Summary – or EPS – form to share information about their employees’ income tax, National Insurance contributions, and statutory payments – examples of the latter include maternity pay, paternity pay and shared parental pay.

The form is different from the FPS, which is the report sent to HMRC about payments and deductions made to employees every time they are paid. Instead, an EPS only needs to be submitted in certain scenarios. These are:

• If you pay Apprenticeship Levy
• To reclaim statutory payments, like statutory maternity pay or shared parental pay
• To claim Construction Industry Scheme (CIS) deductions if applicable and employee allowance
• If employees haven’t been paid within the tax month
• If you’re not operating your business for an extended period of time – this is applicable to seasonal businesses, for example – or if you’re no longer an employer
• To ​​indicate you’re making your final submission for the tax year

Read more: National living wage explained

What does RTI include?

Let’s first take a look at Full Payment Submission (FPS). This form must include:

1. Employees’ personal information: The employee’s full name, date of birth, address, gender, National Insurance number, tax code, and payroll ID.
2. Employee pay and deductions: An employee’s salary, taxable pay, National Insurance contributions, student loan repayments, and actual pay after deductions. You must also include information like pay dates, the frequency of pay, and the tax month number.
3. Employer information: Your employer PAYE and Accounts Office references, HMRC office number, and the tax year your report falls under.

An FPS will also need to include information on new employees who have joined the company, details of employees who have left and confirmation of any workplace pensions you have started paying.

For more details, check out our comprehensive guide to FPS.

An Employer Payment Summary (EPS) form, on the other hand, only needs to be submitted in certain scenarios, which we’ve outlined in the section above. It should include information about your employees’ income tax, national insurance contributions, and statutory payments such as maternity pay, paternity pay, and shared parental pay.

Be sure to pay HMRC by the 22nd of the month to avoid penalties. Read more about how to fill out your form with our guide to EPS.

Remember, RTI covers all employees, including casual, seasonal and temporary staff.

When should I submit my RTI?

An FPS must be submitted every time you pay employees. You should submit the FPS on or before the date you pay your employees – if you submit the FPS after the payment date, you may have to pay a late fee.

The penalty differs for each company size:

• 1-9 employees: £100
• 10-49 employees: £200
• 50-249 employees: £300
• Those with more the 250 employees: £400

HMRC will add further penalties if you still fail to file your RTI after three months, too.

A tax month in the UK starts on the 6th of the month and runs to the 5th of the following month. Employers should submit their EPS form by the 19th of the following tax month at the latest.

If you wanted to submit an EPS for August, for example, the window is open from the 20th of August until the 19th of September.

If you submit the form after this date, you wouldn’t be able to claim or reclaim any statutory payments, or be credited for any statutory pay. It also means you have to pay the full amount and PAYE liability owed.

When a late EPS form is submitted, HMRC will credit you in the following tax month instead – but it’s best to try to avoid this situation if possible.

How do I send my RTI?

Your RTI submissions can be sent to HMRC via three different avenues:

1. Via a payroll software: Payroll software that is compatible with HMRC’s RTI system can generate and submit an EPS form electronically. This is generally the most popular method for businesses.
2. Through an agent or payroll company: Employers can outsource support with submitting EPS forms to a qualified payroll service provider, who will complete and send them on your behalf.
3. HMRC’s Basic PAYE Tools (BPT): Small businesses with a maximum of nine employees can use this tool to submit their EPS or FPS forms online.

The best option varies from business to business, so take some time to explore what each avenue entails before investing in a solution.

What is a final RTI submission?

A final RTI submission is sent either at the end of the tax year, or if your company shuts down and therefore closes its PAYE scheme.

Don’t worry, this isn’t an additional task to the above – your final RTI submission of the tax year can be either your FPS or your EPS – the payday at your company will determine which of these submissions will come last.

Regardless of which form it may be, HMRC asks that you make it clear on your final submission that it is the last submission of the tax year.

How can I view my RTI submissions?

If you sent your FPS submission in the same tax month as you paid your employees, you will be able to view the report on your HMRC online account from the 10th of the next tax month. However, this is different if you submitted your FPS late:

• If submitted between the 6th and 11th: your HMRC online account will update by the 14th.
• If submitted between the 12th and 19th: your HMRC online account will update within two days.
• When submitted on or after the 20th and you did not send a FPS the previous tax month: your HMRC online account will update within two days.
• When submitted on or after the 20th and you sent a FPS the previous tax month: your HMRC online account will update by the 10th of the next tax month.

For an EPS, you will see ‘Accepted’ in the status field on your HMRC account along with a time and date for when it was sent and accepted. You will also receive a confirmation email from HMRC – it’s best to make sure you keep this safe.

Sending your EPS means you can confirm how much you’ve claimed and check how much you owe via your HMRC account. Remember, confirm this within two days or by the 14th of the month if you sent your EPS before the 11th – and pay HMRC by the 22nd of the month to avoid penalties and further paperwork.

Final thoughts

HMRC obligations like real-time information can be tricky to get your head around as a new employer, but these processes will soon become second nature after a few months of submissions.

And this responsibility doesn’t have to be on your shoulders – as you grow, you could invest in payroll software that can automate the process, outsource it to a payroll service provider, or hire your own payroll professional who can take care of this for you.

Read more: if you have employees based overseas, visit our guide to shadow payroll, a process that will keep you compliant with local pay and tax regulations.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.