A guide to Real Time Information (RTI) in Sage 50 Payroll RTI Edition

Transcription

1 A guide to Real Time Information (RTI) in Sage 50 Payroll RTI Edition

2 Welcome Hello, We ve created this guide to help you process under Real Time Information (RTI). From April 2013, employers are legally reuired to report PAYE in real time. Real Time Information is a reform introduced by HMRC which reuires all employers to make regular submissions, rather than once a year at year end. These submissions contain a range of information about the payments made to employees, including how much PAYE and NIC has been deducted. This guide helps you to prepare for RTI by explaining the new submissions procedure and helping you simplify any changes you may need to make to your payroll and business processes. You ll be pleased to know that Sage 50 Payroll RTI Edition contains everything you need to make a seamless transition to RTI. Submitting under RTI is very similar to the previous Internet submissions process of year end or in-year forms you re already familiar with. We hope that this guide is useful in ensuring the seamless transition of your business s payroll to RTI. If you d like more information about RTI, please visit: Sage RTI support site - HMRC website - We re here to support your business. Kind regards, Jim McGlen Head of Customer Services Sage (UK) Ltd North Park Newcastle upon Tyne NE13 9AA

3 Sage (UK) Limited All rights reserved. These materials are designed to help you to use the software they relate to. The materials are written as general rather than specific guidance to assist all of our customers. We always do our best to make sure that the information in the guide is correct but as it is general guidance, no guarantees can be made concerning its suitability for your particular needs. You should consider taking professional advice if you reuire specific guidance on your individual circumstances, for example to ensure that the results obtained from using the software comply with statutory reuirements. Sage owns the content of these materials; this is known as copyright and shown as Sage (UK) Limited. This means you may not copy, modify or distribute the guidance material, either electronically or otherwise, without asking us first. To assist you, we may provide links or refer you to non-sage (third party) information sources, for example, HMRC s website, this is because we want to be helpful. However, because we do not have any control over the content of those non-sage websites we cannot accept responsibility for them. If you access these websites, it is your own responsibility to ensure suitability for your needs. If any non-sage trademarks are used in the materials, we acknowledge ownership of these trademarks by the relevant owner. Use of the software described in this material is subject to Sage (UK) Limited s Licence agreement enclosed with, or displayed by, that software. Sage (UK) Limited North Park Newcastle upon Tyne NE13 9AA 1

4 Contents Chapter 1: Introduction to RTI What is RTI? Why have HMRC introduced RTI? When will RTI affect you? Split and non-standard PAYE schemes How do you become compliant? 5 Chapter 2: RTI Centre RTI Centre 6 Chapter 3: Preparing for RTI your software Ensure you are using the correct version of Sage 50 Payroll Prepare for submitting online Ensure you have the latest product updates installed Checking Sage Software Updates are turned on e-submissions updates Payroll access rights Paying employees by BACS with a Service User Number (SUN) 10 Chapter 4: Preparing for RTI your data Data uality Health Check Company data Employee data Hints and tips to simplify checking data Preparation checklist 18 Chapter 5: Introduction to the new RTI submission types and related features Employer Alignment Submission (EAS) Employer Alignment Submission checklist Full Payment Submission (FPS) Full Payment Submission checklist Employer Payment Summary (EPS) Employer Payment Summary checklist National Insurance Number Verification (NVR) National Insurance Number Verification checklist Submission log IR Secure Mailbox 36 2

5 Chapter 6: Processing payroll under RTI Starters and leavers Processing overview Processing an employee s final pay before they leave Processing casual workers or employees you pay infreuently On Hold status Processing students Paying your employees and the FPS Telling HMRC about adjustments to your monthly or uarterly payments Backup and restore Error corrections and adjustments Payroll Professional Multi-Company Tasks 43 Chapter 7: End of year process under RTI What s no longer reuired? What stays the same? What is the process? 45 Chapter 8: Summary of potential changes to your business processes under RTI Data administration Obtaining timesheets or hours worked from your employees Paying your employees and the FPS 47 Chapter 9: Additional support 48 3

6 Chapter 1: Introduction to RTI 1.1 What is RTI? RTI is a reform of the PAYE system that reuires employers to make submissions of employee payment and deduction information when or before payments are made to employees. It also makes the verification of employee National Insurance numbers more efficient and simplifies the end of year process. Employers may also be reuired to make submissions about their monthly or uarterly payments to HMRC. More information on the different submission types can be found in chapter 5 of this guide, and information about how it may change the way you process payroll, year end, and your business processes can be found in chapters 6, 7 and Why have HMRC introduced RTI? RTI is designed to improve the operation of PAYE and support the introduction of Universal Credits. RTI increases the freuency at which employers submit information to HMRC, allows HMRC to react more uickly and efficiently to changes in employee s circumstances and reduce the likelihood of repayments or bills being issued to employees after the end of the tax year. RTI also helps HMRC reduce costs and deal with non-compliance and fraud more easily. More information on Universal Credits can be found on the DWP website When will RTI affect you? Pilot phase April 2012 to March 2013 Mandatory for all Sage customers April Split and non-standard PAYE schemes Split PAYE schemes A split PAYE scheme is when you process a single PAYE reference company; in more than one data set, in more than one piece of software, or part of the company is processed in-house and part by an accountant or bureau. If you operate a split scheme, you must submit an Employer Alignment Submission (EAS) for each part of your split scheme. When making your EAS you can specify that there will be a number of parts to the EAS for the scheme. For more information please refer to chapter 5.1 Employer Alignment Submission. 4

7 Non-standard PAYE schemes There are special rules about reporting in real time for non-standard PAYE schemes, such as CIS schemes. For more information visit How do you become compliant? Sage 50 Payroll RTI Edition contains everything you need to make you RTI compliant. The RTI functions are visible in the software from April 2013, which is when the majority of employers move to RTI. If you ve joined the RTI pilot and have received a joining date from HMRC, you must activate RTI in your software: Toolbar > RTI Centre > Activate RTI > RTI Join Date box > enter the join date you have received from HMRC. 5

8 Chapter 2: RTI Centre 2.1 RTI Centre To help make your transition to RTI as smooth as possible, in Sage 50 Payroll RTI Edition we ve created the new RTI Centre. When you open the software, you can access the RTI centre from the Welcome to Sage 50 Payroll window. Or, from the toolbar, click RTI Centre. The RTI Centre is available to use at any time, including before you start processing under RTI. This means that you can use it straight away, to help you get your data ready. As well as helping you get ready for RTI, it guides you through making submissions and processing your payroll under RTI. The RTI Centre contains the following great features: Getting ready A guide to getting your data and software ready for RTI. Making submissions What, when and how guides to each of the different types of submission under RTI. Processing and correcting errors Details about how processing routines change under RTI, for example starters and leavers and correcting errors. Links to all of the support you ll need for RTI. Activate RTI If you re taking part in the pilot, you can activate your software for RTI. Checklists, webinars and much more. To keep you up to date with all of the latest information about RTI, we ll be making changes to the content regularly. 6

9 Chapter 3: Preparing for RTI your software 3.1 Ensure you are using the correct version of Sage 50 Payroll We ll issue updates to our products periodically. To check you re on the correct version of Sage 50 Payroll please visit and refer to Ask Sage article number To compare this to your version of Sage 50 Payroll, open Sage 50 Payroll and from the Help menu choose About. From the Program Details section, check the Version Number. If the options or windows don t appear in the seuence outlined above, or you re not using the correct version of Sage 50 Payroll as detailed in article 29126, you should contact Sage Technical Support on Prepare for submitting online With a few exceptions, all employers must now submit their in year and year end returns online. You can, and may already, do this directly from Sage 50 Payroll. To ensure you re ready to submit online, please check the following information: If you ve previously submitted your year end or in-year returns online, visit and log in. Click Manage services and check the following information for the PAYE for Employers service: Your tax office number and reference. You must enter this information in your e-submission settings within Sage 50 Payroll. Your status is active. If you aren t registered or your status is inactive, when you try to submit your year end returns online, they ll be rejected with HMRC error code If you ve not previously submitted online, register with the Government Gateway and activate the PAYE for Employers service. To do this visit click Register (new users) and follow the on-screen instructions. When you register, ensure you make a note of your user ID and password and keep them safe. HMRC no longer confirm the user ID in writing and it won t appear again. You need to enter your user ID and password each time if you log in to the Government Gateway manually, but only need to enter them once in e-submission settings in Sage 50 Payroll. After you register, you ll receive an activation PIN, which you must activate within 28 days of the date on your letter. If you don t activate your PIN within 28 days, you ll have to repeat the registration process. If you need further help, please contact the HMRC Online Services Helpdesk on

10 Once you ve completed the above you should check your e-submission settings within Sage 50 Payroll: 1. Navigation bar > e-submissions > e-submission Settings. 2. Check or enter the following information: Company Name* Tax Dist./Ref* User ID* Password* Show FPS checklist Under RTI the submission of your company name is mandatory. Check that the name is correct, and if necessary amend it. Under RTI the submission of your tax district reference is mandatory. Check that the reference is correct, and if necessary amend it. Enter your user ID for Enter your password for This option only appears after you have migrated to RTI. Select this check box if you want to see a checklist before you submit an FPS. Tip: All boxes marked with an asterisk are compulsory. If you change any of the information above, the information in the Company > Settings > Details tab also updates. 3. Select any other check boxes that are relevant to you. If you need help understanding the check boxes, to open the Help system, press F1. 4. Contact Details tab > check or enter your contact details. HMRC uses the address you enter here to confirm receipt of your submission, so ensure that it is correct. 5. If you are acting as an agent > select Submit as an agent > enter your contact details. 6. Save > Close. 3.3 Ensure you have the latest product updates installed From time to time we may need to update your software. There are two methods we use to do this via the Internet. Please check the following chapters for more information. 8

11 3.3.1 Checking Sage Software Updates are turned on You should have Sage Software Updates turned on. To check they are active: Tools > Internet Options > select Check for Sage software updates but ask me whether I want to download and install them [Recommended] > OK. Your software will periodically check for updates and advise you if you need to take one. Or, if you want to manually check for updates, click Help then Check For Updates. If reuired follow the on-screen instructions to update your software e-submissions updates Each time you open Sage 50 Payroll, log into a company and set the process date then attempt to make a submission to HMRC or open the IR Secure Mailbox your software checks to ensure you are using the latest version of our e-submission components. If you re using an old version you re prompted to install updated components; simply follow the on-screen instructions to update your software. 3.4 Payroll access rights Sage 50 Payroll users need to be granted permission to make RTI submissions. By default, only the Manager user name has permission. If a user doesn t have access to RTI submissions, the option isn t available to them and will appear to be greyed out. To grant access to other users please follow the steps below. To set up RTI permissions your process date must be set to after 5 April Log in to Payroll as Manager or as a user with access to Access Rights. 2. Tasks > Security > Access Rights 3. Users area > select the user you want to update. 4. Allow Access To These Areas > e-submissions. 9

12 5. Select the options you want to grant for this user. 6. If reuired, to give other users access repeat steps Click Save. If you need more information about the different submission types and functionality before granting access please see Chapter 5 of this guide. 3.5 Paying employees by BACS with a Service User Number (SUN) If you pay employees via BACS, which is defined as submitting to BACS directly or indirectly with a Service User Number (SUN), additional information must be included in your RTI Full Payment Submission (FPS), in the form of a reference of characters or hash. If you pay your employees via Internet banking, using the e-banking option in Sage 50 Payroll, this does not necessarily mean that you pay via BACS and need a hash reference. If you pay via BACS you will have an SUN. If you re unsure about whether or not this affects you, please speak to your bank or BACS provider. The hash is generated by Sage 50 Payroll using a recognised algorithm based on the employer s bank sort code, the employee s bank sort code, the net pay for the period and a reference of four random characters. In addition to including the hash in the FPS, the reference of four random characters must be entered into field seven of the BACS payment instruction created by the BACS software. When HMRC receive the FPS they will decode the hash to get the reference of four random characters and they will then cross reference them with the characters included in the BACS payment instruction. This allows them to check that the payment information included in the FPS is what the employee has actually received via BACS. If you need to obtain the four digit reference from Sage 50 Payroll: Reports > Employee > Employee BACS Hash Reference > Print or Preview. If you re unsure whether you need to use BACS hash and the four digit reference, or for more information on entering this into the BACS system, please contact your bank or BACS software provider. 10

13 If you are a BACS user as defined above you must assign the employees who are paid using BACS a new Payment Method called Direct BACS. To do this, you can either: Open each Employee Record in turn, click the Employment tab and from the Payment Method drop down select Direct BACS. Assign Direct BACS to all or groups of employees via Global Changes. To do this: 1. Select the employees you want to update > Tasks > Global Changes > Assign Employee(s) a new > Pay Method. 2. Select a new employee pay method > Direct BACS > OK. 3. Yes > OK. We ve updated the default BACS reports that appear within Pre-Update Reports so you can now choose whether you d like to run them for BACS or Direct BACS employees. If you have your own edited version of these or similar reports you may need to update them to ensure they run correctly for the new Direct BACS payment method. If you need help with this please contact our Report Design technicians on For more information about RTI and BACS, please visit 11

14 Chapter 4: Preparing for RTI your data 4.1 Data uality The most important thing you can do in advance to prepare for RTI is to make sure that your data is accurate. This will ensure a smooth transition to RTI and prevent incorrect tax deductions for your employees and HMRC inspections for you. It s your responsibility as an employer to ensure this information is correct. Prior to making your first RTI submissions you must take some time to ensure your data is of the highest possible uality. You should also ensure the uality of your data is high on an on-going basis by obtaining full and correct information from new employees and accurately transferring this to Sage 50 Payroll. In 2011 HMRC published some statistics about the uality of data submitted to them in the 2009/2010 tax year: 824 employees were submitted with a surname of unknown. 160 employees were submitted with the name Test. 507 submissions contained the employee A N Other. 128 employees were submitted as Mr or Mrs Dummy. Some employees were submitted as X or casual or cleaner. More than 2000 employees were submitted with an NI number of AB and over 1000 with an NI number of AA Your Sage Payroll software already makes certain fields compulsory and validates certain company and employee information as it s entered for the first time via the software itself or via Sage import routines, or you amend information as it changes. However, even when you complete compulsory fields, your software can t validate that you ve entered the correct information so you should review the information contained in your software to ensure it is correct. Some import routines, such as those developed by third party software companies, may circumvent the validation rules that Sage 50 Payroll employs when data is entered via the software itself. If your business uses third party software to enter or update company and employee information you should pay particular attention to the data entered to ensure it is correct. 12

15 4.1.1 Health Check In Sage 50 Payroll RTI Edition, to help you uickly and simply check the accuracy of your data for RTI, we ve created a new Health Check option. This saves you time and reduces the effort of looking for errors. The Health Check option checks this for you at the click of a button, providing a list of errors and steps to be taken to correct them. We recommend that you perform a health check when preparing for RTI, after taking on new employees and at regular intervals, for example every month. To perform a health check 1. Log in to Sage 50 Payroll with the Manager user name. 2. Toolbar > Health Check. Sage 50 Payroll checks the data for all employees within the company you currently have open. 3. To print a copy of the Health Check report > click the relevant tab > Print. 4. To send the information to Excel > click the relevant tab > Send to Excel. 5. Close. For more information about the Health Check option, please visit and refer to Ask Sage article number Company data Under RTI the submission of your Accounts Office Reference becomes mandatory. Other mandatory information is your company name and address and PAYE reference, also known as Tax Dist./Ref. in Sage 50 Payroll. To check these: 1. Company > Settings. 2. Check and if reuired update the company name and address and PAYE reference. 3. HMRC Payments tab > check the Accounts Office Reference. Your Accounts Office Reference is validated against your PAYE reference by Sage 50 Payroll to ensure it is correct based on the PAYE reference entered by you. If you receive an error message that you ve entered an invalid Accounts Office Reference please ensure that both the PAYE reference and Accounts Office Reference are correct. If to the best of your knowledge these are correct please contact your local tax office for further clarification. Sage cannot verify these details for you. 13

16 4.1.3 Employee data Employee personal data The key data for HMRC is the employee s name, NI number, date of birth, gender and address. The most important things for you to consider are: - You must provide an employee s surname, forenames including second forenames and initials. - The employee s forename(s) should be the name that HMRC know the employee by. In most cases this will be their full given name and you should therefore not use shortened versions or nick names, for example, if someone s given name is James and this is how HMRC know them, you must have James entered into your software and not Jim, Jamie or any other variation. 14

17 Some people may prefer to be known by their middle name or an alternative name; these must not be used in your software or when making RTI submissions if HMRC know the employee by their full given name. - The NI number should be correct. If you don t know an employee s NI number leave the box blank and Sage 50 Payroll will populate it with a temporary entry. This is submitted to HMRC blank and triggers the process for HMRC to verify the NI number. Do not guess an NI number or put any form of standard entry in this box. - Gender must be included. - Correct date of birth must be included. - Full address including postcode needs to be included. - It is your employee s responsibility to inform HMRC of changes in circumstances that may affect the records HMRC hold about them, for example a change in surname due to marriage. You may have already submitted data to HMRC via Sage 50 Payroll, either at payroll year end, or during the tax year in the form of P45s or P46s. Each time you submit, Sage 50 Payroll validates the information sent against HMRC validation rules and will either provide you with messaging around the changes you need to make, or advise you that information such as invalid characters will be removed for the purposes of the submission. Employee payment data As part of the information gathered for the introduction of Universal Credits, you must tell HMRC approximately how many hours per week each employee normally works, as part of your regular submission. You can store this information in Sage 50 Payroll in the Salary option. To access this: 1. Employee Record > Employment tab. 2. Salary > This employee works section > enter the number of hours the employee normally works per week. If you use pay elements you must not enter any information into the I want to pay this employee box. Entering a value into this box when you already use pay elements could cause the amount you pay to your employees to double. 15

18 3. Save > Close. When submitted, the hours will be translated into one of the following four bands: Band A Band B Band C Band D Up to hours 16 to hours 30 hours or more Other To enter employee hours globally If you have a number of employees who work the same number of hours, you can save time by entering or changing their hours at the same time. To do this: 1. Select the employees > Tasks > Global Changes > Statements of Employment > Set Contracted Hours. 2. Enter the contacted hours per pay period > OK > Yes > OK. What if an employee doesn t work set hours? HMRC have told us that for employees who don t work set hours, the hours for these employees should be submitted as band D - Other. To do this, in the This employee works box enter

19 During the submission this is translated as Band D. 4.2 Hints and tips to simplify checking data Each time you open, save and close an Employee Record Sage 50 Payroll validates information such as the NI Number, NI category against the type of pension assigned to the employee and whether the address boxes are blank. We ve created a new letter which you can print directly from Sage 50 Payroll and send to your employees to check that you re holding correct data for them. To run the letter; Reports > Company > select RTI Employee Details Verification > Print. You can use reports such as Employee Details Personal to check an employee s personal information at a glance rather than opening each Employee Record in turn. To run this report, from the top of the Payroll desktop, open Reports and from the right-hand side of the menu scroll down until you see the report, select it then click either Print or Preview. There are many reports in Sage 50 Payroll that may make the data checking process easier for you. Please take some time to look through the reports in your product. If you d prefer to check your employee data outside of Sage 50 Payroll you can export the data using Export Payroll Data functionality. To access this, from the File menu choose Data Export, then Export Payroll Data and follow the on-screen instructions. For more information about exporting payroll data, please visit and refer to article number You can also use the Microsoft Integration functionality in Sage 50 Payroll to send employees to Excel, export them as contacts in Outlook or create Microsoft Word mail merge documents. For more information about Microsoft Integration please visit and refer to article numbers 11554, 11558, and

20 4.3 Preparation checklist I know how to access and use the RTI Centre I am using the correct version of Sage 50 Payroll I am set up to make online submissions I ve got the latest software updates installed I ve checked Sage software updates are turned on I ve checked and amended the access rights I ve checked my BACS settings I ve performed a health check I ve checked my company name, Tax Dist./Ref. and Accounts Office Reference I ve checked my employees names are correct I ve checked my employees NI numbers are correct I ve checked my employees dates of birth are correct I ve checked my employees addresses are correct I ve checked my employees gender is correct I ve entered hours worked for each of my employees Notes: 18

21 Chapter 5: Introduction to the new RTI submission types and related features 5.1 Employer Alignment Submission (EAS) What is it? The Employer Alignment Submission (EAS) is a one-off submission that you ll perform when you begin making RTI submissions. It s a snapshot of your data that provides HMRC with a benchmark of who is or has been employed by your company in the current tax year. HMRC state that you must submit an EAS if you have a large PAYE scheme with over 250 employees. However, using Sage 50 Payroll, you must submit an EAS no matter what the size of your business. HMRC uses this data to match, align and correct the records they hold for your employees in their systems. If you submit any incorrect information or data that doesn t match HMRCs records they will contact you in the future to uery this. The main elements to this submission are: - Company PAYE Reference, Accounts Office Reference and Tax Office Number - Employee name and address - Employee NI number and tax code - Employee payroll ID - Employment start date, and employment end date if applicable What you need to do before submitting - Check and cleanse your data as outlined in Chapter 4 - Enter all new starter information in Sage 50 Payroll - Add any employees that you may have previously processed outside of Sage 50 Payroll, for example casual employees dealt with under P38A arrangements. These employees must be processed in Sage 50 Payroll as part of your regular payroll run from the start of the tax year - Ensure that anyone who has left your company in the current tax year has been marked as a leaver in Sage 50 Payroll Making the submission 1. e-submissions > Employer Alignment Submission. If this option is not available it may be because you don t have permission. Refer to chapter 3.4 Payroll access rights. 19

22 2. Next > choose from the following options. Yes, this is the only submission for this scheme and all employees are included. No, there will be <number> parts to the alignment submission for this scheme. Select this option if you don t operate a split PAYE scheme. Select this option if you do operate a split PAYE scheme and specify the number of parts. For more information about split PAYE schemes please refer to chapter 1.4 Split and non-standard PAYE schemes. 3. Next > Finish > complete the Employer Alignment Submission wizard. 20

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24 5.1.1 Employer Alignment Submission checklist I ve completed all the tasks in the Preparation checklist I ve entered all new starters and any casual or infreuent workers and processed them I ve processed all leavers in this tax year Make your Employer Alignment Submission on the date specified by HMRC Notes: 22

25 5.2 Full Payment Submission (FPS) What is it? The Full Payment Submission (FPS) is the main submission that you ll make each time you pay your employees. The submission contains: - Starter and leaver information - Employee information such as name and address, NI number, tax code - Employee payment and deduction information - PAYE, NIC and Student Loan contributions What you need to do before submitting - Ensure you ve completed your payroll run in full and no further adjustments need to be made to the current period - Print all payslips and pre-update reports - Put irregular payment employees on hold. Please see chapter for more information. - Complete the Update Records step of the payroll process - Mark employees who have left the company as a leaver The date to use When processing under RTI, HMRC use the process date contained in the Full Payment Submission (FPS) to determine if your submission is late or not. So it s important that you understand what this means to you and your employees. You should use the date the employees receive their wages, the payment date, as the process date. If the regular payment date falls on a non banking day, and the employees are to be paid the previous banking day, use the non banking day as your process date but you must still submit your FPS on or before the previous banking day, which is the date the employees are paid. For more information about process dates and RTI, please visit and refer to article number Making the submission 1. Payroll > Full Payment Submission. If this option is not available it may be because you don t have permission. Refer to chapter 3.4 Payroll access rights. 23

26 2. Make sure you have performed all tasks in the Full payment Submission checklist window > Submit. 3. If any employees are on hold for the period, the following window appears. Clear the check box for any employee whom you don t want to include in the FPS > Submit. 24

27 4. Complete the Internet Submissions wizard. Tip: You can check the date you last made an FPS in the Last FPS Date column in the employee list. 25

28 5.2.1 Full Payment Submission checklist I ve added any new starters and processed any leavers since the EAS or last FPS I ve completed my payroll run in full I ve printed my payslips and pre-update reports I ve put any irregularly paid employees on hold I ve completed the Update Records step of the payroll process I ve processed leavers Make your Full Payment Submission when or before your employees are paid Notes: 26

29 5.3 Employer Payment Summary (EPS) What is it? You must only submit an Employer Payment Summary (EPS) if one of the following circumstances apply to you: You re reducing your payment to HMRC because: - You can recover statutory payments for the given month. - You have suffered CIS deductions for the given month. - You re part of the NIC holiday scheme. You wish to inform HMRC that no payment is due for the given month. You wish to inform HMRC that no payment is due for the given and future tax months. The date to make the submission You submit an EPS at the end of the tax month when or before your payment to HMRC is due. You may not need to submit one for every tax month. You only need to submit an EPS in the above circumstances. If you don t pay HMRC monthly, set your process date to the month you wish to pay up to. For example, if you want to pay the first uarter, set your process date to the end of month three, 5 July. If you choose the option stating that no payment is due for the given month, then you must wait until at least the end of the actual given tax month before submitting the EPS. For example, if you re stating that no payment is due for tax month three, you can not submit the EPS until at least 5 July. What you need to do before submitting - Ensure all pay periods in the relevant tax month have been run and Update Records has been completed for each of them. Tax months run from the 6th of one month to the 5th of another, for example 6 April to 5 May. - Set the process date in Sage 50 Payroll to the last day of the tax month you want to run the EPS for. For example, if you want to run the EPS for tax month 3 set the process date to 5 July. - Run report P32 - Employer Payment Record for the tax month you re submitting the EPS for. This report helps you confirm that you need to run the EPS and also check the values during the submission process. 27

30 Reports > Period End > Form P32 Employer Payment Record > Print or Preview. - Check the following value on the P32 to see if you need to submit an EPS. Line 14 If there is a value on this line you must submit an EPS. - Check the following records that you hold externally to Sage 50 Payroll to verify whether you need to submit an EPS. CIS deductions If you have suffered any CIS deductions this month you must submit an EPS. NIC holiday If you re reducing the amount you pay to HMRC this month under the NIC holiday scheme, you must submit an EPS. Making the submission 1. e-submissions > Employer Payment Summary. If this option isn t available it may be because you don t have permission. Refer to chapter 3.4 Payroll access rights. 2. Select the reason why you re submitting an EPS > Next. 3. Verify your statutory payment recovered values, and NIC compensation amounts if you are classed as a small employer and can claim this. Use your P32 to check that the values are correct. If you need to change the values, you can change them here. If the values are correct > Next. 28

31 The EPS always contains cumulative year to date figures. 4. Enter any CIS deduction and NIC holiday amounts > Next. You can t calculate these values via Sage 50 Payroll, you must enter them manually based on your external records. 29

32 5. If you are satisfied that the values previously entered are correct > Finish. If you want to go back and review or change the amounts > Back > repeat steps 2, 3 and 4 above. 6. Complete the Internet Submissions wizard. 30

33 5.3.1 Employer Payment Summary checklist I ve completed each payroll period, including update records, for the tax month I ve set the process date to the last day of the tax month I am submitting for I ve run the P32 - Employer Payment report for the relevant tax month I ve checked the values on the P32 and external records and confirmed I need to submit an EPS I ve checked the values are correct on the EPS wizard Make your Employer Payment Summary when or before the payment is made to HMRC Notes: 31

34 5.4 National Insurance Number Verification (NVR) What is it? Use the National Insurance Number Verification (NVR) submission to either obtain the correct NI number for an employee where you don t have one or have used a temporary number, or confirm that the existing NI number you have for an employee is correct. When you need to make this submission You would make the submission when you reuire confirmation of an employee s NI number. What you need to do before submitting Ensure the data you hold for this employee is accurate as per the instructions in Chapter 4 of this guide. Making the submission 1. Select the employees you want to verify the NI number for > e-submissions > NI Verification. If this option isn t available it may be because you don t have permission. Refer to Chapter 3.4 Payroll access rights. 2. Complete the Internet Submissions wizard. 32

35 How do I receive the confirmed NI number information back from HMRC? You ll receive notices back from HMRC in your Secure Mailbox in Sage 50 Payroll in the form of an NVREP or NOT. You can apply these notices to the relevant employee at the click of a button. If you haven t used the Secure Mailbox before or would like further information about it, please see chapter 5.6 below or visit and refer to Ask Sage article number

36 5.4.1 National Insurance Number Verification checklist I ve checked my employee s name is correct I ve checked my employee s date of birth is correct I ve checked my employee s address is correct I ve checked my employee s gender is correct Make your National Insurance Number Verification Submission Notes: 34

37 5.5 Submission log You may want to check or review the previous submissions you ve made, or notices you ve applied to your employees. You can do this via the e-submissions Log. The log shows you summaries of submissions, filter by submission type and date regardless of whether it s a successful or failed submission. You can drill-down on the submissions contained in the log for more information about who was submitted, can also print and delete entries from the log, and obtain correlation IDs (uniue HMRC identifier for each submission) for submissions in case HMRC get in touch with you about the submissions you ve made. To open the log: e-submissions > e-submissions Log. 35

38 To view the details: Select the submission > Details. 5.6 IR Secure Mailbox You can use the IR Secure Mailbox to receive notifications from HMRC and, if they relate to specific employees, apply them automatically to the employee record without manual entry. Under RTI HMRC may contact you more freuently with notifications that arise from the submissions you ve made, for example, if you make an FPS submission of an employee with a temporary or blank NI number, HMRC will verify the number for you. As a result it will be important to check your IR Secure Mailbox on a regular basis. To check the IR Secure Mailbox 1. e-submissions > e-submissions Settings. 2. Ensure Check for new messages when opening the IR Secure Mailbox is checked. 3. Save > Close. 4. IR Secure Mailbox. Sage 50 Payroll now automatically checks for HMRC notifications, downloads and displays them. For further information about IR Secure Mailbox, please visit and refer to article number

39 Chapter 6: Processing payroll under RTI 6.1 Starters and leavers RTI will change the way you tell HMRC about new employees and people who are leaving your employment. When someone joins your company: P45 You should accept the P45 they bring from their previous employment as usual. Create a new record for them in Sage 50 Payroll and enter the information from the P45 as usual. You must now select Statement A, B or C when setting up an employee that comes to you with a P45. This information is not supplied on the P45 so you ll need to ask your employee. The statements are: - A. This is their first job since last 6 April and they have not been receiving taxable Jobseeker s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension. - B. This is their only job, but since last 6 April they have had another job, or have received taxable Jobseeker s Allowance, Employment and Support Allowance or taxable Incapacity Benefit. They do not receive state or occupational pension. - C. They have another job or receive a state or occupational pension. There will no longer be a reuirement to submit the P45 (starter) form to HMRC. Information on new starters is automatically included as part of your regular FPS. P46 If a new employee joins your company but does not have a P45, you should issue them with a P46. Create the Employee Record as usual. In the Employee provided form box enter P46 then select Statement A, B or C. You don t need to submit the P46 form to HMRC. Information on new starters is automatically included as part of your regular FPS. P46 (Expat) Use form P46(Expat) if you take on a new employee who has been seconded to work in the United Kingdom whilst remaining employed by an overseas employer. Create the Employee Record as usual. In the Employee provided form box enter P46 (Expat) then select the relevant accommodation status. If appropriate, select the EEA Citizen and EPM6 Scheme check boxes. You don t need to submit the P46 (Expat) form to HMRC. Information on new starters is automatically included as part of your regular FPS. 37

40 Tip: In Employee Record > Employment tab > the Employment Type box now displays Expatriate. P46 (Pen) Use form P46(Pen) to tell HMRC you are paying someone a pension. Create the Employee Record as usual. In the Employee provided form box enter P46 (Pen). If appropriate, select the Recently bereaved check box. In the Annual Pension box enter the full annual amount of the pension. You don t need to submit the P46(Pen) form to HMRC. Information on new starters is automatically included as part of your regular FPS. Tip: In Employee Record > Employment tab > the Employment Type box now displays Pension. If HMRC reuires you to re submit starter information for an employee: 1. Employee Record > Employment > select the FPS Starter check box. 2. Pay and submit the employee as normal. Their revised starter information will be sent in the next FPS. When someone leaves your company Make the final payment to them, ensuring you select the Select this check box if your employee is leaving and this is their final payment box. Print off reports and payslips and update records as usual. Mark them as a leaver in Sage 50 Payroll as usual. Issue the employee with their paper P45 as usual. You no longer need to submit the P45 (leaver) form to HMRC. Information about leavers is automatically included as part of your regular FPS. 6.2 Processing overview 1. Setting the process date. When processing under RTI, HMRC use the process date contained in the Full Payment Submission (FPS) to determine if your submission is late or not. So it s important that you understand what this means to you and your employees. You should use the date the employees receive their wages, the payment date, as the process date. If the regular payment date falls on a non banking day, and the employees are to be paid the previous banking day, use the non banking day as your process date but you must still submit your FPS on or before the previous banking day, which is the date the employees are paid. 38

41 For more information about process dates and RTI, please visit and refer to article number Payroll process The way you process your weekly, fortnightly, four-weekly, and monthly payroll in Sage 50 Payroll will remain largely the same under RTI. The Full Payment Submission step has now been added after Update Records. However, because of the type of data HMRC reuire under RTI there may some changes to the way you need to use your product; these are outlined below Processing an employee s final pay before they leave. When processing an employee s final payroll you should select the Select this check box if your employee is leaving and this is their final payment check box. Not only can this provide advice on outstanding holidays, holiday fund and statutory payments and recalculate Directors NIC, but it can also help to indicate which employees are included as leavers on the FPS. Remember, if an employee has left your employment you must mark them as a leaver in the normal way before submitting your FPS Processing casual workers or employees you pay infreuently On Hold status If you don t include an employee on an FPS for three months HMRC will close the record they hold for that person. If you have employees that aren t paid every week or month, you should use the On Hold status in Sage 50 Payroll to indicate they are still on your books but aren t being paid for any particular period. There are two ways you can put employees On Hold. 39

42 To put one employee on hold Employee Record > Employment tab > Status drop-down list > On Hold > Save > Close. To put several employees on hold 1. Select the relevant employees > Tasks > Global Changes. 2. Assign Employee(s) a new > Status 3. Select a new employee status > On Hold > OK > Yes > OK. When the employees need to be paid again, you must change their status back to OK. To do this, repeat the above steps selecting the OK status Processing students Under RTI, the P38(S) procedure is no longer valid, so all employees must be added to your payroll as normal and submitted to HMRC. When setting up a new employee who is a student, set up their record as normal, either entering previous employment information from a P45 or ask them to complete a P46 form. You must not ask them to complete form P38(S). If you already have an employee on your payroll under the P38(S) procedure and you re expecting them to return, you must mark them as a leaver now, then ask them to complete a P46 when they return, as you would with any employee who doesn t provide a P Paying your employees and the FPS HMRC reuires you to submit the FPS when or before payment is made to your employees. For example, if your employees are paid monthly on the 25th of the month and you use banking software to import or enter their payment values, you might process in Sage 50 Payroll on the 22nd of the month and submit the data to the bank so that the money clears in time for the 25th. In this circumstance you need to submit your FPS at some point between 22nd and 25th of the month, that is, the day that you processed and calculated the values, and the date the money was available to your employees. You must run the Update Records process in Sage 50 Payroll before submitting your FPS. In the above example the last possible date you could run Update Records would be 25th of the month. If you process your payroll and pay your employees cash every Friday you d need to update records and submit your FPS on the same day. 40

43 Please remember you must run Update Records before submitting the FPS Telling HMRC about adjustments to your monthly or uarterly payments If your company can claim any of the following, for the relevant tax month you will need to make an Employer Payment Summary submission. This changes your payroll month end process. Please see chapter 5.3 of this guide for more information about how to submit an EPS. Statutory payments recovered NIC compensation on statutory payments CIS deductions suffered NIC holiday Backup and restore By default Sage 50 Payroll will back up your RTI files whenever you take a backup of your data. By default Sage 50 Payroll will not restore your RTI files when you restore your data. This is to ensure that when you continue processing you don t incorrectly submit information for previous periods as this information will already have been received by HMRC. If you move Sage 50 Payroll to a new PC and need to restore a backup, you should ensure that the RTI Files option is selected in the Restore Wizard. This ensures that any information about previous submissions is transferred to the new PC Error corrections and adjustments Correcting an FPS Correcting values before the FPS has been submitted for the period If you spot an error before you ve submitted your FPS for the period, you can either: - Use the Rollback or Restore options in Sage 50 Payroll to make the correction immediately, before the FPS is sent. You can then send the FPS as normal once the payroll run is complete. - Send the current FPS as normal and make the correction in the next payroll period For example, if you pay monthly, have paid your employees for tax month 2 on 30 May, and submitted your FPS then notice that you have underpaid an employee by 100; this amount can be added to the payment you make to the employee in June. 41

44 Correcting values after the FPS has been submitted for the period If you spot an error after you have submitted your FPS for the period, you can either: - Use the Rollback or Restore options in Sage 50 Payroll to make the correction. If you use Rollback or Restore in this circumstance HMRC do not want another FPS to be submitted for the period. When you submit your FPS for the next period it will contain the corrected year to date values, which is satisfactory for HMRC. - Make the correction in the next payroll run. For example, if you pay weekly, have paid your employees for tax week 7 on 18 May and submitted your FPS, then notice that you have underpaid an employee by 100; this amount may be added to the payment you make to the employee in week 8 on 25 May. Correcting personal employee information If you have made an error on the FPS relating to the employee s personal details you must contact HMRC to report the error. If the employee s personal details have changed for example, surname, address, then advise your employee to contact HMRC to report the change. You can then enter the correct employee details on your next FPS. If you just enter the details on the FPS and don t report the changes to HMRC then the new details will not be updated on the employee s record, and this may result in a uery from HMRC. If the error relates to the date the employee started working for you do not change the start date on the next FPS, as this results in a duplication of the employee s record on HMRC systems. Correcting errors for leavers You owe the employee extra pay but have already submitted the employee as a leaver under RTI To resolve this, remove the leave date from the employee s record. Set their tax code to 0T W1/M1 and process the extra pay in the next pay period. Re-enter their original leave date then submit your FPS for the period, on which they ll appear. An employee has left but owes you money To resolve this, remove the leave date from the employee s record. Roll back to their last pay period, where you should make the relevant deduction from their pay then update records. In your next pay period, set their tax code to 0T W1/M1 and process the employee with zero values. Once you ve updated records for the period, re-enter the employee s original leave date and submit your FPS. The corrected year to date values are now submitted. 42

45 You submitted your FPS but forgot to mark someone as a leaver To resolve this, you must report the error to the HMRC RTI Customer Advice Team on You have made an employee a leaver in error For example an employee changes their mind and decides to continue working for you. To resolve this, remove the leave date from the employee s record. You can then continue to process the employee as normal and the employee is included on the next FPS. If you have already given the employee their P45, you must create a new employee record and treat them as a new starter. Correcting the EPS If you have submitted an EPS with incorrect values you should submit a new EPS to replace it. When you have corrected any values you need to in Sage 50 Payroll and are ready to submit a new EPS please follow the guidance in chapter 5.3 of this guide. Correcting the EAS You cannot re -submit an EAS unless instructed to by HMRC. Re submitting an NVR You can re submit an NVR if necessary Payroll Professional Multi-Company Tasks If you are a Sage 50 Payroll Professional user and process multiple companies, in Sage 50 Payroll you can process Employer Alignment Submissions and Full Payment Submissions via the Multi-Company Tasks option. 1. Ensure you have a backup for each of the companies you want to submit. 2. Set the process date in Sage 50 Payroll to the appropriate date for the companies you want to submit. For example if you have more than one company that you process on the same date and need to submit an FPS for, set the process date accordingly based on the period you have processed for these companies. 3. Company > Multi-Company Tasks > OK. 4. Multi-Company Tasks window > select the companies you want to submit. 5. Step 1 > Type drop-down list > e-submissions/rti. 6. Task drop-down list > choose the submission type you want to make. 43

46 44 7. Run Task > complete the Internet Submissions wizard.