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Under real time information (RTI) employers must report details of pay and deductions to HMRC by means of a full payment submission (FPS) ‘on or before’ the date on which payment is made to the employee. Where no payments are made to employees in the tax month, employers must notify HMRC of this by filing an employer payment summary (EPS).

This means that employers submit an FPS to HMRC on or before each payday in the month. Until 5 April 2016, a slight relaxation applies to micro employers (with nine or fewer employees) who were in existence on 6 April 2014 who can make a single submission for the month on or before the last payday.

Penalties are charged for late returns. No penalty is charged for the first month that returns are made late. Thereafter a penalty is levied for each month in which one or more return is made late. The penalty ranges from £100 to £400 depending on the number of employees in the PAYE scheme. An additional penalty of 5% is charged if the return is three months late. The penalty will be charged in-year on a quarterly basis. However, HMRC do allow a three-day period of grace before a penalty is charged.