Monthly payroll compliance

Produced by Tolley in association with

Employment Tax

Guidance

Monthly payroll compliance is concerned with both RTI and payment compliance, although an employer may also need to comply with other legislation.

Employers must pay over to HMRC the correct amounts of tax, NIC (employees’ and employer’s), deductions including student / postgraduate loans and make the correct statutory payments recoveries (for child-related payments, not sickness payment). This has taken on more importance under real time information (RTI), as HMRC’s systems calculate the monthly PAYE scheme liability by assessing the full payment submission (FPS) and employer payment summary (EPS) submissions for each tax month. See the Real time information guidance note.

Reconciliations

To assist with compliance, regular reconciliation would normally be made by the employer, eg at least monthly. The precise nature of the reconciliations may vary depending on the software and accounting systems used. These checks should be considered as part of audit and internal control (rather than merely tax requirements) and employers may wish to refer to internal audit guidelines. However, the following are the typical objectives of such reconciliations, with any differences or discrepancies

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