The following Employment Tax guidance note Produced by Tolley in association with Vince Ashall provides comprehensive and up to date tax information covering:
Most employers have to report payroll information to HMRC electronically in real time under real time information (RTI). See the Real time information guidance note. 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.
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.
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.
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 less than the lower earnings limit (LEL) (£120 weekly for 2020/21). If the employer does not have to maintain a deductions working sheet in respect of an employee, they are also excused from r
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