Real time information on or before reporting for micro employers

23 September 2015

HMRC has published the findings of research conducted to help establish readiness among the existing micro employer population to move to full on or before reporting in April 2016.


One requirement of RTI is to report PAYE information to HMRC ‘on-or-before’ the date they paid their employees. In March 2013 HMRC announced a temporary “easement” for employers with 49 or fewer employees which enabled employers who pay staff more often than monthly to report employee payments to HMRC once a month. This was introduced from April 2013 for a six month period but was subsequently extended for a further six months. This was replaced with a narrower easement in April 2014, which enables existing micro employers only (those with 9 or fewer employees) to report on or before the last payment day of the tax month until April 2016 with the clear intention that ALL employers need to adapt to ‘on or before’ reporting by April 2016.

HMRC commissioned research to help establish readiness among the existing micro employer population to move to full on-or-before reporting. The research comprised 50 telephone interviews with micro and small employers that had taken part in the previous RTI main migration1 survey. Respondents were selected according to their use of the easement, size and industry sector.

Most employers in this research expect to be able to comply with the requirement without any major challenges for their business; there was very limited awareness of the implications of not submitting on-or-before for employers or employees.

While most employers in this research had not changed their payroll processes in order to report on or before, some made changes such as: moved from paper to electronic payroll; changed software provider (moved away from Basic PAYE Tools); or moved the payroll from weekly, or from a combination of weekly and monthly, to monthly, to ease administration. Micro and small employers that had chosen to comply with the on-or-before requirement from the outset tended to be very proactive and were comfortable making adjustments to their payroll to ensure they were able to comply.

Employers still using the easement: did not understand the on-or-before requirement; needed sign-off from senior staff who might not be available; late timesheets delayed the payroll process; or staff holidays meant submissions were late. Late submissions were also due to a general lack of familiarity with running the payroll or technical issues such as poor internet connections.

Some employers were confused by OOB and thought that it referred to making payments of income tax and NICs to HMRC at the same time as submitting their FPS. Consequently, some employers submitted the FPS late as they thought this enabled them to pay their income tax and NICs to HMRC late, thereby easing their cash flow.

Employers continuing to use the easement considered they needed support, including: tips and approaches to training staff in the RTI processes; information about how to deal with challenges/complications to submissions (e.g. sick pay, maternity/paternity pay) that potentially delay FPS submission; a process to follow if the employer experiences a mitigating circumstance which prevents them from submitting on time; how to resolve submission errors and the re-submission process; payroll software reminders to encourage submission ‘on-or-before’; and a dedicated FPS submission helpline, on-line chat or email facility.

The full research report can be accessed through the link below.

PAYE Real Time Information (RTI) ‘on-or-before` requirement - Research with micro and small employers