Real Time Information (RTI) is the system HMRC uses to collect payroll data from employers. Under RTI, employers submit payroll information electronically each time employees are paid, rather than only at the end of the tax year. This approach improves accuracy, supports more timely tax collection, and ensures deductions such as Income Tax and National Insurance are reported in near real‑time.
RTI stands for Real Time Information. It is a mandatory reporting system through which employers send detailed payroll information to HMRC every time employees are paid — not just at year end. This includes:
Employee earnings
Tax code and deductions
National Insurance contributions
Student loan deductions
RTI ensures HMRC receives up‑to‑date payroll data, enabling more accurate tax records for employees and smoother interaction with Universal Credit and other benefits.
Under RTI, employers must submit a Full Payment Submission (FPS) each time they run payroll. The FPS includes:
Gross pay
Net pay
Income Tax deducted
National Insurance contributions
Statutory payments (such as maternity/paternity)
Student loan deductions
The FPS must be filed on or before each pay date. This real‑time reporting replaces the old system of reporting only at year end.
RTI delivers benefits for both employers and employees:
HMRC receives accurate, current payroll information
Employees’ tax records are updated throughout the year
There is better alignment with benefit systems and tax credits
Employers reduce year‑end workload and errors
Non‑compliance can lead to penalties and complications with HMRC.
Before using RTI, your business must be registered for Pay As You Earn (PAYE). This involves notifying HMRC that you intend to pay employees and operate payroll.
RTI submissions must be made using payroll software that can connect securely to HMRC systems. Simple spreadsheets are not sufficient — you need MTD‑compatible payroll or accounting software.
An FPS must be submitted:
Each pay date, or
Before employees are paid
Delays can lead to penalties.
If you did not pay employees in a period but need to claim employment allowances or statutory payments, an EPS must be submitted.
Employers often encounter the following issues:
Late FPS submissions — which trigger HMRC penalties
Incorrect tax codes or NI calculations — leading to employee confusion
Software errors or incompatibility — causing rejected returns
Misreporting statutory payments — such as SMP or SSP
Ensuring data is clean and complete before submission reduces these risks.
To report accurately under RTI, employers must keep up‑to‑date records of:
Employee National Insurance numbers
Tax codes
Student loan status
Attachment of earnings orders
Details of statutory leave and pay
Accurate employee data ensures correct tax treatment and reporting.
Although RTI reduces year‑end workload, employers must still provide:
P60s to employees summarising annual earnings and deductions
Final payroll submissions to HMRC
RTI makes these much simpler because detailed records are already maintained throughout the year.
HMRC can issue penalties for:
Late filing of FPS
Incorrect reporting
Failure to report before pay day
Penalties depend on how late the return is and whether HMRC considers the omission to be careless or deliberate.
Successful RTI reporting relies on accurate payroll systems and processes.
Applegrow Financial Advisors can support you by:
Setting up HMRC‑compatible payroll systems
Ensuring timely and accurate FPS and EPS submissions
Reviewing employee data and tax codes
Advising on statutory pay reporting
Minimising risk of penalties and ensuring compliance
With expert guidance, you can manage payroll with confidence and avoid common pitfalls.
Contact Applegrow Financial Advisors today for tailored support with Real Time Information and payroll reporting.
