PAYE & RTI Payroll Health Check for UK Employers

Every UK employer who pays staff (including a director paying themselves a salary) must run PAYE under the Income Tax (Pay As You Earn) Regulations 2003. Since Real Time Information (RTI) was introduced, you must send HMRC a Full Payment Submission (FPS) on or before each payday showing what you paid every employee and what you deducted (regulation 67B), send an Employer Payment Summary (EPS) by the 19th of the following tax month to claim allowances or report that you paid no one, and pay the PAYE and National Insurance you owe by the 22nd if you pay electronically (the 19th by post). You also have to give each employee an itemised payslip (Employment Rights Act 1996, section 8), a P60 by 31 May each year, a P45 when they leave, and keep payroll records for at least three years.

HMRC charges automatic late filing penalties under Schedule 55 to the Finance Act 2009 when an FPS is late, starting at £100 a month for employers with 1 to 9 staff and rising to £400 a month for 250 or more, after the first default in each tax year. Late payments attract penalties under Schedule 56 of up to 4% of the amounts paid late across the year, plus interest. Getting PAYE wrong also causes knock-on problems for staff, such as wrong tax codes, missing pension contributions and incorrect Universal Credit awards, because the Department for Work and Pensions uses RTI data. Most issues come down to a few habits: registering before the first payday, sending the FPS on time, and reconciling what you report with what you pay.

Use this free PAYE health check to see whether your payroll is meeting HMRC’s RTI filing, payment and record-keeping rules, and what to fix before penalties land.