RTI ― reporting ‘on or before’ time of payment

By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • RTI ― reporting ‘on or before’ time of payment
  • Exceptions to ‘on or before’ rule
  • Common problem areas
  • What to do if RTI report not made ‘on or before’ payment

As set out in the Real time information guidance note, most employers now have to report payroll information to HMRC electronically in real time. The most usual report made to HMRC under this system is the Full Payment Submission (FPS) which has to be transmitted to HMRC shortly before or at the time the employer makes a payment to employees. This is commonly referred to as the ‘on or before’ rule and represents a significant change from the previous system under which employers were required to keep records of all payments made to employees and the tax and NICs deducted, but were only required to send to HMRC full details of all such payments and deductions at the end on the year under the annual P35 process.

Although the RTI system at large has represented a huge change for employers, requiring changes in their software systems and payroll practices, the ‘on or before’ rule is probably the one aspect of RTI that causes most ongoing difficulties for many employers.

This guidance note looks at the number of the problem areas that employers regularly encounter in trying to apply the ‘on or before’ rule and draws together exceptions to the rule and HMRC’s concessions and guidance.

Exceptions to ‘on or before’ rule

Some of the exceptions listed below derive from the PAYE regulations and others relate to HMRC statements about what it will accept. The main exceptions are listed in a table on the GOV.UK website .

Payment to employees where deductions working sheet not required

The PAYE regulations require employers to maintain deductions working sheets in respect of most employees, but this requirement does not apply to employees who do not present a P45 and are either casual employees who work for the employer for less than a week or to longer term employees who are paid

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