One of the biggest concerns for payroll operators with RTI is "What happens if the RTI submission is wrong?".
The regulations state that the RTI file must be transmitted before or at the time of the payroll period update. With most payroll software the RTI transmission and the payroll period update will be part of the one process. However, it can be fairly common for the update to occur and then the operator realises that something was missed, like an overtime amount or some promised bonus. At present (prior to RTI), all the operator has to do is reverse or correct what they have just processed. But how would RTI deal with this?
This very scenario was one of the main issues brought up by us and other payroll software developers during the various RTI workshops organised by HMRC. It would be unworkable if there was some complicated resubmission process. Also, the periodic payroll processing would become very stressful if the implication of getting it wrong every now and again was a lot more work.
HMRC took this on board and conceded that once the year to date figures in the next RTI submission were correct, then the employer's obligations have been met. There is also a procedure in place if an incorrect RTI submission is made for a final pay period (e.g. week 52 or month 12).
The year to date or cumulative amounts are the most important items in the RTI submission with relatively minor importance being placed on the pay or tax figures for a particular pay period.
So, all of you payroll operators can relax. You are allowed to be human now and again!
Even if you have not yet enrolled in the RTI scheme or you have not yet received notice of the implementation date for RTI into your organisation, as an employer, enrolment is inevitable.
The earlier you start to prepare for RTI, the smoother the implementation of the new scheme will be on you and your employees.
As an employer it is important that you are prepared. There are steps and procedures that you can implement now in order to prepare.
Audit the data held for all current employees ensuring it complies with the HMRC FPS submission requirement. If this data is incomplete, or requires verification, then initiate this process now eliminating any obstacles in good time before your first FPS submission. This will ensure the majority of data entry is complete prior to implementation date also. Include data capture requests with payslips to ensure employees read the request.
Communicate with employees advising them why it is vital for the personal information held on file to be accurate and complete. Implement procedures to facilitate two way communication between employees and managers, to answer any queries your employees may have and to facilitate the advising of changes to personal information.
Prepare new employee data request forms to be completed upon commencement of employment and prior to the first payment to the employee. This should encompass all the information HRMC requires you to hold for RTI purposes. Implement this procedure now to identify common errors, issues or shortfall in communication and methods to improve this process.
Develop an in-house training programme to:
Prepare in-house procedures to ensure periodical payroll data is complete and accurate prior to signing off the periodical payroll using reports produced from your payroll software. Identify the data checks or audit procedures that can be made to eliminate errors and the associated reports that your payroll software may be able to produce or allow you to customise to complete this task.
Having a series of control procedures in place will eliminate errors in submission to HMRC under the RTI scheme. The earlier these are implemented the sooner they will become an integral part of the payroll process.
The 2011-12 Employer Annual Returns (P35 and P14s) were due by 19 May 2012. These returns are now over 4 months late and HMRC has started to send penalty notices if their records indicate that they have not yet received your return.
The penalty will be £100 per 50 employees for each month the return is outstanding, from 20 May 2012 to 19 September 2012. So an employer with 50 or less employees will receive a £400 penalty.