RTI Removal of late reporting reason code EWednesday, December 9th, 2015
HMRC permit “micro employers” to report late if they were an existing employer on 5 April 2014 and had fewer than 10 employees on 6 April 2015. Until 5 April 2016, they can choose to report monthly, on or before the last payday in the tax month.
The rules for these employers is to complete the FPS as follows:
- Set the ‘Pay frequency’ to how often employees are paid
- For the ‘Payment date’, use the last payment date in the period
- For the ‘Tax week/month number’, use the corresponding tax week
- For the ‘Number of earnings periods…’, enter the appropriate number
- For employee’s pay and deductions use the total figures for the month.
- Set the late reporting reason as “E”.
This is a relaxation that has existed for the last two years. It has been confirmed that this relaxation on PAYE reporting obligations ends on 5 April 2016 and will not be extended.
HMRC will be sending letters to the employers who use the relaxation to advise them that normal RTI rules apply from 6 April 2016
Employers should check their 2016/2017 software to ensure late reporting reason code E has been removed.
Employers need to exercise caution because, if the software provider has not removed reason code “E” and it is used in error in 2016/2017, the return will not be rejected.