Real Time Information, commonly called RTI, is the system employers use to report payroll information to HM Revenue & Customs. Instead of sending payroll details at the end of the tax year, employers report employee pay, Income Tax and National Insurance each time their workforce is paid.
For small businesses, RTI makes accurate and timely payroll processing particularly important. Incorrect information or missed submissions can cause problems with HMRC and may also affect employees. At Every Penny Accounts, we help businesses understand their payroll responsibilities and keep the process running correctly.
How Does RTI Payroll Work?
Each time you run payroll, your payroll software calculates your employees’ gross pay, deductions and net pay. This information is then reported to HMRC via a Full Payment Submission (FPS). In most circumstances, the FPS must be submitted to HMRC on or before the date employees are paid.
You may also need to send an Employer Payment Summary, or EPS. This is used in situations such as claiming statutory payment reductions or reporting that no employees were paid during a particular tax month. According to the official HMRC guidance on running payroll, employers must complete several payroll tasks during every tax month.
Information included within RTI submissions can cover:
- The employer’s PAYE and Accounts Office references
- Employee names and identifying information
- Gross wages or salary
- Income Tax and National Insurance deductions
- Employer National Insurance contributions
- Student and postgraduate loan deductions
- Statutory payments, including maternity and sick pay
- Pension contributions
- Details of new starters and employees leaving
- The date employees receive their pay
Every Penny Accounts can manage these calculations and submissions through our professional payroll services remotely across the UK, helping small businesses meet their responsibilities without payroll becoming another time-consuming administrative burden.
Accurate RTI Submissions Support HMRC Compliance
RTI gives HMRC an up-to-to-date record of employee payments and payroll deductions. HMRC uses the submitted information to calculate how much PAYE and National Insurance a business owes. Employers can then view their balance through their online account before making the required payment.
Accuracy is essential because HMRC compares the information submitted through payroll with the payments it receives. Incorrect employee details, pay figures, tax codes, or payment dates can create discrepancies. Checking payroll information before submitting an FPS helps reduce the likelihood of corrections, queries and unexpected liabilities.
Late or Incorrect Reports Can Cause Problems
HMRC may issue a late filing notice if a business pays employees but fails to send its FPS on time. Financial penalties can also apply in some circumstances. Late, missing or inaccurate reports may affect an employee’s income-related benefits, including Universal Credit, because those calculations can use payroll information supplied through RTI.
Mistakes can still happen, particularly when employee hours change or information arrives late. If an error is discovered, it should be corrected as soon as possible using the appropriate payroll process. Keeping clear records makes it easier to identify what went wrong and provide the correct figures.
RTI Remains Important Even With a Small Team
It is easy to assume that detailed payroll reporting only applies to large companies, but RTI also affects businesses with one or two employees. Once a business operates PAYE, it must complete the required submissions regardless of whether employees are paid weekly, fortnightly or monthly.
Small employers may have fewer people on the payroll, but they often have less time available for administration. The person managing payroll may also be responsible for sales, customer service and daily operations. Using an experienced payroll provider can free up that time while helping employees receive accurate wages and payslips.
Good Payroll Records Make RTI Easier
Accurate records are the foundation of reliable RTI reporting. Employers should retain details of employee pay, deductions, reports sent to HMRC, payments made to HMRC, tax code notices, absence records and taxable expenses or benefits. PAYE records generally need to be kept for three years from the end of the relevant tax year.
It is also important to maintain an organised process for starters and leavers. New employees should provide their P45 or complete HMRC’s starter checklist, while departing employees will require the correct leaving details and documentation.
RTI Is Only One Part of Small Business Payroll
Although RTI is a central payroll responsibility, employers must also calculate wages, apply current tax codes, process statutory payments, issue payslips and manage workplace pension duties. They must account for changes such as pay rises, bonuses, unpaid leave, maternity leave and employee departures.
These responsibilities can become more complex as a business grows. A structured payroll process helps ensure changes are recorded promptly, and information reaches HMRC at the right time. It also gives employees confidence that their wages, deductions and pension contributions are being handled accurately.
Contact Every Penny Accounts For Small Business Payroll Services
Whether you are employing your first member of staff or need support with an established payroll, Every Penny Accounts can help. We provide practical payroll support covering calculations, payslips, RTI submissions and year-end requirements. Contact Every Penny Accounts to discuss your business, workforce and preferred pay schedule with our team.
