HMRC RTI fix for annual schemes

Reporter, Accountancy Daily [2010-2021]

26 Jul 2013

HMRC has announced it has fixed problems with the new Real Time Information (RTI) system which meant that from April 2013 it was unable to deal with requests from employers asking to change the status of their PAYE schemes to annual.

The department said the necessary fix was now in place and HMRC will be accepting all the requests that have been made and changing those schemes to annual. HMRC will not, however, be notifying employers when that change has been made.

In its notification, HMRC said that some of the requests which have been submitted do not meet the requirements for an annual scheme, which are that all the employees are paid annually and at the same time or same date and that the employer is only required to pay HMRC annually .

Under RTI, once a business is registered as an annual scheme, an Employer Payment Summary (EPS) is not required for the 11 months of the tax year where no payments are made to the employees.HMRC's debt management system will already have a record of the month the employer is due to pay, based on payments in previous years. The department says this information has been transferred to a new accounting system and is recorded as the annual payment/filing month.

If an existing annual employer changes the date/month of payment to the employee(s), they should complete a Full Payment Submission (FPS) for the month that the payment is made to the employee(s). On receipt of the FPS HMRC's systems will change the annual payment/filing month over to that month.

If an employer pays an employee, or employees, and submits a FPS for more than a single month in the year, HMRC will automatically cancel the annual payer status for that year and following years. The employer will be sent a letter advising the status cancellation and the debt management processes will revert to expecting filing/payment on a monthly basis.

HMRC also reminded employers and agents who intend to apply for a scheme to become an annual scheme that they will need to submit a 'NIL EPS/period of inactivity EPS' until the registration has been confirmed.