RTI – The Full Payment Submission (FPS) Part 1Saturday, January 28th, 2012
Last week, we advised that there will be five types of submissions, though employers, or bureaus if the payroll is outsourced, may not be required to make all of them:
- Employer Alignment Submission (EAS)
- Full Payment Submission (FPS)
- Employer Payment Summary (EPS)
- National Insurance Verification Request (NVR)
- Earlier Year Update (EYU)
We concentrated on the first submission, the EAS, which is a mandatory requirement for large schemes (over 250 employees) and / or where the PAYE scheme is a split scheme. The EAS is a once-only submission, performed for the purpose of ‘Payroll Alignment’ as the first step of moving to RTI. Simply, the EAS will align employee records on the payroll system with the employee record held under that tax reference at HMRC. Employers may choose to make the EAS voluntarily or may be required to as a constraint of their payroll software. Employers are advised to check with their provider / bureau as to the functionality in this regard.
For employers where there is no obligation to complete the EAS, i.e. under 250 employees and not a ‘split’ PAYE scheme, the first FPS that is sent under RTI will also act to provide the Payroll Alignment. If this is the case, the first FPS must show every employee that has been paid since the start of the tax year, regardless of whether they have been paid in the current period. Therefore, this will include leaver information. For employers who have an obligation to complete the EAS, i.e. 250 employees or more and / or a ‘split’ scheme, the first FPS will also advise HMRC of any changes that have happened since the EAS – address, name etc
HMRC advise that, if used for Payroll Alignment, the FPS will be checked for data quality, which may result in them contacting the employer to discuss the submission and, possibly, request it to be resent. In an update to RTI software developers on 19 January 2012, HMRC advised that if the FPS contains a National Insurance Number (NINO) that cannot be matched to their database, an ‘unsolicited’ NINO notification will be sent back to the employer making the submission. This will be via a ‘NVREP’ message, which will apply to other RTI submissions as well, which developers must ensure their payroll systems are capable of receiving this.
One Payroll Alignment has taken place, by either the EAS or FPS, the employer will be considered to have joined RTI for that PAYE scheme. The relevant RTI submissions must be made to HMRC and the process of sending the P45 and P46 information will cease – the RTI submissions will contain all the P45 and P46 information and are, therefore, not necessary.
The FPS is the main RTI online submission, normally only consisting of the payments and deductions made for payees in that payroll group paid in that pay period. The requirement under RTI is to advise HMRC details of the employees, payments and deductions at the time of, or before, the net payment is made to the employee. If the pay frequency is weekly, there is a requirement to advise HMRC this information on a weekly basis, if a bi-weekly pay frequency, the requirement is also bi-weekly etc. HMRC will use the data totals from FPS submissions to update employees’ National Insurance, Student Loan and PAYE records. Plus, the information on the FPS tells HMRC the monthly / quarterly tax and NICs liability that it can expect to receive as a remittance.
Note that address details are only updated for new starters. Following that, the address information is simply used for matching to employee records. So, to reduce the FPS file size, if the employer holds a full NINO for the employee, there is no need to supply their address each time the FPS is sent. Employees must be informed that when they change address, they must advise HMRC via the e-form on the HMRC Website. RTI will not facilitate address updates any more than the P14 process used to.
A list of the data items required for the FPS will be provided next week.
- Payroll Help’s RTI Coverage
- Improving the Operation of Pay As You Earn (PAYE) – HMRC Impact Assessment
- Universal Credit – Welfare that Works
- Improving the Operation of Pay As You Earn (PAYE) – Collecting Real Time Information
- HMRC Press Statement 04 April 2011
- HMRC Statement 13 May 2011
- Summary of Responses 30 September 2011
- HMRC – Draft RTI Regulations (PAYE)
- HMRC – Draft RTI Regulations (NICs)
- HMRC – Draft RTI Regulations (CIS)
- HMRC – Draft PAYE Direction (Technical Note)
- NDS – HMRC Press Statement 23 November 2011
- HMRC - Employer Bulletin 39
- NDS – HMRC Press Statement 12 December 2011
- HMRC – Improving Your Payroll Data
- HMRC – Starters and Leavers Scenarios December 2011 (removed by HMRC 2012)
- HMRC – Technical Note ‘Proposal to Abolish the P45/P46 Forms’
- HMRC – Initial Guidance on RTI Items May 2011
- HMRC – Payroll Alignment January 2012
- HMRC – PAYE Update 10 – NINO Verification Response (NVREP)