RTI on Open Payroll
Structure of this webinar
● What is RTI?
● Checks on existing employee data
● New employee data you will need to enter
● E...
What is RTI
OpenPayrollHQ.com
"Real time information"
● Replaces annual return to HMRC (P35 and P14
submissions).
● Now ne...
Implications of RTI
OpenPayrollHQ.com
● "Data cleansing" - ensure your existing data on Open
Payroll is up to date.
● Some...
Existing Employee Data
OpenPayrollHQ.com
Name
John Smith - NOT Smith J, Jonathon Smith.
J Smith is deprecated by HMRC and ...
Existing Employee Data (continued)
OpenPayrollHQ.com
© Clear Books Limited 6
National Insurance number
● Fixed format - AB...
Existing Employee Data (continued)
OpenPayrollHQ.com
© Clear Books Limited 7
New Employee Data
OpenPayrollHQ.com
You will also have to add some new data about your
employees which never previously ha...
New Employee Data (continued)
OpenPayrollHQ.com
© Clear Books Limited 9
New Employer Data
OpenPayrollHQ.com
© Clear Books Limited 10
Payment Date
● used to generate the BACS "hash" (more on this...
New Employer Data (continued)
OpenPayrollHQ.com
© Clear Books Limited 11
New Employer Data
OpenPayrollHQ.com
© Clear Books Limited 12
Payment Account Sort Code
● Important in generating the BACS ...
New Employer Data
OpenPayrollHQ.com
© Clear Books Limited 13
Full Payment Submission
OpenPayrollHQ.com
© Clear Books Limited 14
● Full Payment Submission (FPS)
○ Filed at any point du...
Full Payment Submission on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 2
Full Payment Submission on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 2
Full Payment Submission on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 2
Full Payment Submission on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 18
Full Payment Submission on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 19
Types of submission - EPS
OpenPayrollHQ.com
© Clear Books Limited 20
Employer Payment Submission
● Filed where the employe...
EPS on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 21
EAS and NINO
OpenPayrollHQ.com
© Clear Books Limited 22
● Employer Alignment Submissions - EAS
○ One off submission for ne...
New Joiners and Leavers
OpenPayrollHQ.com
© Clear Books Limited 23
● Previously: HMRC had to be notified of all new joiner...
Paying your employees
OpenPayrollHQ.com
© Clear Books Limited 24
You may have had heard about the BACS "hash" that you
nee...
Paying your employees (continued)
OpenPayrollHQ.com
© Clear Books Limited 25
If you use Faster Payments
● Individually usi...
Hash code on Open Payroll
OpenPayrollHQ.com
© Clear Books Limited 26
Correcting Mistakes
OpenPayrollHQ.com
© Clear Books Limited 27
http://www.hmrc.gov.uk/payerti/reporting/errors.htm
● In th...
Correcting Mistakes (continued)
OpenPayrollHQ.com
© Clear Books Limited 28
● Many mistakes (such as the use of an incorrec...
Correcting Mistakes (continued)
OpenPayrollHQ.com
© Clear Books Limited 29
● HMRC have indicated they will take a tolerant...
OpenPayrollHQ.com
© Clear Books Limited 30
Any questions?
KEY MESSAGE: File an FPS on or before
every pay day.
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RTI on Open Payroll

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Real Time Information reporting of payroll data to HMRC became mandatory in the UK from April 2013. This presentation explains what RTI is and how to use it on Open Payroll.

Published in: Business, Economy & Finance
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RTI on Open Payroll

  1. 1. RTI on Open Payroll
  2. 2. Structure of this webinar ● What is RTI? ● Checks on existing employee data ● New employee data you will need to enter ● Employer data ● Types of submission ● New joiners and leavers ● Paying your employees ● Correcting Mistakes © Clear Books Limited 2 OpenPayrollHQ.com
  3. 3. What is RTI OpenPayrollHQ.com "Real time information" ● Replaces annual return to HMRC (P35 and P14 submissions). ● Now need to report to HMRC on or before every pay day. ● Reporting is done electronically. ● Intended to support the Universal Credit reforms to benefits and reduce over and underpayments of tax. ● 1.4 million small and medium sized businesses affected. © Clear Books Limited 3
  4. 4. Implications of RTI OpenPayrollHQ.com ● "Data cleansing" - ensure your existing data on Open Payroll is up to date. ● Some new data needs to be entered. ● Timing of RTI submission: - ○ Employers paying their employees weekly will need to submit weekly returns. ○ Directors cannot retrospectively adjust salary to cover their drawings from the company. ● Paying your employees by BACS. ● New procedures for leavers and joiners. ● RTI does not affect payments to self employed subcontractors or freelancers. © Clear Books Limited 4
  5. 5. Existing Employee Data OpenPayrollHQ.com Name John Smith - NOT Smith J, Jonathon Smith. J Smith is deprecated by HMRC and not supported by Clear Books. Only first two forenames are submitted. Check spelling on official documents: - ○ passport ○ driving license ○ birth certificate ○ deed poll ○ HMRC correspondence © Clear Books Limited 5
  6. 6. Existing Employee Data (continued) OpenPayrollHQ.com © Clear Books Limited 6 National Insurance number ● Fixed format - AB123456A ○ Two letter prefix (you can check which prefixes are valid at http://www.hmrc.gov.uk/paye/payroll/year-end/errors.htm#x7 ○ 6 digit number ○ One letter suffix - A, B, C or D Gender Date of Birth ● Check to official documentation
  7. 7. Existing Employee Data (continued) OpenPayrollHQ.com © Clear Books Limited 7
  8. 8. New Employee Data OpenPayrollHQ.com You will also have to add some new data about your employees which never previously had to be recorded: - ● Working hours. ○ Important for benefits. ○ Minimum wage legislation doesn't apply to directors. ● Irregular employment indicator ○ Casual and agency workers, for example. © Clear Books Limited 8
  9. 9. New Employee Data (continued) OpenPayrollHQ.com © Clear Books Limited 9
  10. 10. New Employer Data OpenPayrollHQ.com © Clear Books Limited 10 Payment Date ● used to generate the BACS "hash" (more on this later). ● on Clear Books payment date must be set for each type of payroll period: - ○ annual, quarterly, monthly, 4 weekly, 2 weekly, weekly
  11. 11. New Employer Data (continued) OpenPayrollHQ.com © Clear Books Limited 11
  12. 12. New Employer Data OpenPayrollHQ.com © Clear Books Limited 12 Payment Account Sort Code ● Important in generating the BACS "hash" ● 6 digit number format PAYE Accounts office reference ● Important to ensure success of electronic submissions ● Format 123AB12345678 PAYE employer reference ● Also needed to ensure successful submission ● Shorter than PAYE accounts office reference
  13. 13. New Employer Data OpenPayrollHQ.com © Clear Books Limited 13
  14. 14. Full Payment Submission OpenPayrollHQ.com © Clear Books Limited 14 ● Full Payment Submission (FPS) ○ Filed at any point during the tax year on or before each pay day. ○ Your first FPS will check employee details. ○ New leaver and joiner information submitted with subsequent FPS. ○ This is the main type of submission ○ There is a link at the bottom of each pay run to begin submitting the FPS
  15. 15. Full Payment Submission on Open Payroll OpenPayrollHQ.com © Clear Books Limited 2
  16. 16. Full Payment Submission on Open Payroll OpenPayrollHQ.com © Clear Books Limited 2
  17. 17. Full Payment Submission on Open Payroll OpenPayrollHQ.com © Clear Books Limited 2
  18. 18. Full Payment Submission on Open Payroll OpenPayrollHQ.com © Clear Books Limited 18
  19. 19. Full Payment Submission on Open Payroll OpenPayrollHQ.com © Clear Books Limited 19
  20. 20. Types of submission - EPS OpenPayrollHQ.com © Clear Books Limited 20 Employer Payment Submission ● Filed where the employer is not paying all deductions on to HMRC ○ SMP ○ CIS - not supported yet but we are working on this ○ No payments being made in the tax year ● Final submission for tax year ● Ceasing to be an employer.
  21. 21. EPS on Open Payroll OpenPayrollHQ.com © Clear Books Limited 21
  22. 22. EAS and NINO OpenPayrollHQ.com © Clear Books Limited 22 ● Employer Alignment Submissions - EAS ○ One off submission for new RTI users ○ Checks employer data to HMRC's records ○ Not compulsory for businesses with less than 250 employees - instead use initial FPS. ○ Open Payroll does not offer the Employer Alignment submission ● National Insurance number verifications ○ Open Payroll does not offer National Insurance number verifications
  23. 23. New Joiners and Leavers OpenPayrollHQ.com © Clear Books Limited 23 ● Previously: HMRC had to be notified of all new joiners and leavers in the forms P46 or P45/3. ● Now: New leaver and joiner information is automatically submitted with a standard FPS BUT ○ Need to give leavers a written P45 to show to their new employers ○ Make sure you get your new joiner information accurately entered on the system before you file the FPS - think about how this will affect payments.
  24. 24. Paying your employees OpenPayrollHQ.com © Clear Books Limited 24 You may have had heard about the BACS "hash" that you need to include in field 7 of your BACS pay run. ● The overwhelming majority of our customers pay by Faster Payment, cheque, or cash - very few SMEs pay their customers directly by BACS. ● The Faster Payments system uses the BACS system to make payments. ● Most "Faster Payments" users use their banks custom interface to access the BACS.
  25. 25. Paying your employees (continued) OpenPayrollHQ.com © Clear Books Limited 25 If you use Faster Payments ● Individually using the bank's online interface ● As a batch using the bank's own CSV format which does not contain a field 7. The RTI rules don't apply - it's best to speak now with your bank to ascertain the situation for you, but almost all Clear Books customers will not be able to (and so will not need) to include an RTI hash.
  26. 26. Hash code on Open Payroll OpenPayrollHQ.com © Clear Books Limited 26
  27. 27. Correcting Mistakes OpenPayrollHQ.com © Clear Books Limited 27 http://www.hmrc.gov.uk/payerti/reporting/errors.htm ● In the first instance you should always review FPS data to ensure it is correct before you file it. Open Payroll has a review submission phase, which you should use. ● You need to contact HMRC is you have recorded your employee's personal details incorrectly. ● Do not submit a correcting FPS if an employee leaving or starting date was incorrect - it can cause tax code errors.
  28. 28. Correcting Mistakes (continued) OpenPayrollHQ.com © Clear Books Limited 28 ● Many mistakes (such as the use of an incorrect tax code) will be picked up by HMRC upon submission. ● If you wish to change the amount of pay an employee receives in the current tax year then resubmit all FPS starting with the earliest one to change. ○ HMRC will work out what has happened from the change in the "Earnings year to date" field. ○ Only "Undo" the pay of employees you wish to submit a revised FPS for.
  29. 29. Correcting Mistakes (continued) OpenPayrollHQ.com © Clear Books Limited 29 ● HMRC have indicated they will take a tolerant approach to genuine mistakes if reasonable and honest efforts have been made to submit the correct data the first time round in the 2013/14 tax year. ● There are fines for incorrect submissions. ● Read more here http://www.hmrc.gov. uk/payerti/reporting/late-reporting.htm
  30. 30. OpenPayrollHQ.com © Clear Books Limited 30 Any questions? KEY MESSAGE: File an FPS on or before every pay day.

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