Statutory lodgement: RTI — the FPS, EPS and paying HMRC

The calendar at a glance

Tax months run 6th to 5th, and the tax year runs 6 April to 5 April. Where a figure is year-scoped it belongs to the 2026–27 tax year unless stated otherwise.

The FPS: report on or before payday

The core RTI rule is one sentence: report on or before payday. GOV.UK puts it this way — "As an employer running payroll, you need to report your employee's pay, any payrolled benefits, and deductions in a Full Payment Submission (FPS) on or before their payday (unless an exception applies)." You use your payroll software to send the FPS "to tell HM Revenue and Customs (HMRC) about payments to your employees and what deductions to their pay you've made," and you "Include everyone you pay, even if they get less than £96 a week."

The date you enter matters as much as the deadline. HMRC's instruction: "You must enter the usual date that you pay your employees, even if you pay them earlier or later. For example, if you pay your employees early because your usual payday falls on a Bank Holiday, you should still enter your regular payday." And the on-or-before duty is independent of how you pay HMRC — "Send the FPS on or before your employees' payday, even if you pay HMRC quarterly instead of monthly."

You can report ahead of payday but not too far: "You can send an FPS before your regular payday, for example if your payroll staff are going on holiday," but "Do not report too early - you'll need to send a corrected FPS to update HMRC if information changes, for example an employee leaves or changes tax code," and "You cannot send reports for the new tax year before March."

Late reporting: the exceptions and the reason codes

A defined set of situations lets you send an FPS after payday, each with its own deadline. For example: where "Your employees' payday is on a non-banking day, for example weekend or bank holiday," you report "On the next banking day - but enter the regular payment date in the 'payment date' field and select 'Late reporting reason' code G." Where you have "not received your employer PAYE reference yet," you report as soon as possible after you receive it, again selecting code G. An employee with no P45 who is paid less than £96 a week or has worked with you less than a week can be reported within 7 days; a benefit that attracts National Insurance but not Income Tax through payroll, within 14 days of the end of the tax month.

Behind those situations sits a fixed code set. In HMRC's RTI Data Item Guide the "Late reporting reason" field is Data item 154 — not item 43, which is the payment date — and it takes these values:

Note there is no code E — HMRC's guide adds, "You should not provide a reason where none of the above apply." The live GOV.UK guidance maps the same letters to plain-English situations (G "As soon as possible," H by the 19th of the tax month after the original FPS, and so on). Code E was a pre-2016 temporary "on or before" relaxation for micro employers, withdrawn from 6 April 2016 and absent from the current list — we carry that as historical context; it is a best-guess authority, not a claim we re-verified verbatim.

Penalties for late reporting are not new: HMRC notes that "Penalties for late reporting started from 6 October 2014."

The EPS: recoveries, the Levy and no-payment months

The FPS reports what you paid; the Employer Payment Summary tells HMRC about things that reduce your bill or that the FPS cannot carry. Send an EPS as well as an FPS if you "reclaim statutory maternity, paternity, adoption, neonatal care, parental bereavement or shared parental payments," "claim the Employment Allowance," "can reclaim Construction Industry Scheme (CIS) deductions as a limited company," or "pay the Apprenticeship Levy if you, or employers you're connected to, have an annual pay bill of more than £3 million." And "Send an EPS instead of an FPS if you've not paid any employees in a tax month."

The EPS has its own clock: "Send an EPS by the 19th of the following tax month for HMRC to apply any reduction (for example statutory pay) on what you'll owe from your FPS. The tax month starts on the 6th." For a month with no wages, "Do not send an FPS. Send an EPS by the 19th after the tax month you did not pay any employees." You can also flag a longer gap in advance: "You can tell HMRC in advance that you will not be paying any employees for between one month and 12 months. To do this, enter dates in the 'Period of inactivity' fields in your EPS."

The Apprenticeship Levy rides on the EPS. It "is an amount paid at a rate of 0.5% of an employer's annual pay bill," you "must report and pay Apprenticeship Levy monthly through your Employee Payment Summary," and a £15,000 allowance "reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year" with no carry-over. The levy bites only where the annual pay bill exceeds £3 million.

First FPS, corrections and year-end

New employers get a first-submission cushion: HMRC "will not charge a penalty if … you're a new employer and you sent your first FPS within 30 days of paying an employee." Do nothing at all, though, and the scheme lapses — HMRC "will close your PAYE scheme if you're a new employer and you do not send a report to or pay HMRC in 120 days."

Corrections are year-to-date, not line-by-line reversals: "To correct a mistake made in the current tax year, update the year-to-date figures in your next regular FPS." For an earlier year in the window "between 6 April 2020 and 5 April 2026," you "Submit another FPS with the correct year to date figures." (The 2020–2026 window is the range stated on the live page as of 10 July 2026.)

Year-end is three moves. First, the final FPS: "Send your final Full Payment Submission (FPS) on or before your employees' last payday of the tax year (which ends on 5 April). Put 'Yes' in the 'Final submission for year' field (if available) in your payroll software" — or send a final EPS instead if you forgot the flag, your software lacks the field, or you paid no one in the final period. Second, "Give your employees a P60 — By 31 May." Third, "Report employee expenses and benefits — By 6 July": you "fill in an online form called a P11D," plus "an online form to HMRC at the end of the tax year for any Class 1A National Insurance you owe … called a P11D(b)." Employers with fewer than 500 employees file through PAYE Online; 500 or more file through payroll software; HMRC accepts paper only if you have stopped trading. Any Class 1A National Insurance is then payable "by 22 July each year for the previous tax year," or "by 19 July if paying by post."

Paying HMRC: the 22nd, the 19th and quarterly

Reporting and paying are separate clocks. You "must pay your PAYE bill to HM Revenue and Customs (HMRC) by … the 22nd of the next tax month if you pay monthly [or] the 22nd after the end of the quarter if you pay quarterly - for example, 22 July for the 6 April to 5 July quarter," and "If you pay by cheque through the post, it must reach HMRC by the 19th of the month."

Small employers can slow the cadence: "If you usually pay less than £1,500 per month, you may be able to pay quarterly instead of monthly. Contact the payment helpline to find out." The amount you owe each month is the tax and National Insurance reported on the previous tax month's FPS minus any EPS reductions you sent before the 19th of the current tax month; the bill may also fold in Student Loan repayments, Class 1A/1B National Insurance, CIS deductions and Apprenticeship Levy.

You can automate it with a Direct Debit set up through your HMRC online account, which HMRC collects "based on the amount in your return (also called a Full Payment Submission (FPS))" — set it up "at least 4 working days before your payment due date," and it shows on your bank statement "as 'HMRC SDDS'." Pay late and "You'll be charged interest daily at the standard rate."

When you're late: two penalty ladders

Late payment. "The first failure to pay on time does not count as a default." After that, penalties scale with the number of defaults in the tax year — 1 to 3 defaults, 1%; 4 to 6, 2%; 7 to 9, 3%; 10 or more, 4% — and "Daily interest will continue to build up on all unpaid amounts from the due and payable date to the date of payment." Leave it longer and it compounds: "If you've still not paid a monthly or quarterly payment in full after 6 months, you'll be charged an additional penalty of 5% of the amounts unpaid. A further penalty of 5% will be charged if you've not paid after 12 months."

Late filing. Monthly penalties run by employee band: 1 to 9 employees, £100; 10 to 49, £200; 50 to 249, £300; 250 or more, £400. "If you run more than one PAYE scheme, you can be charged penalties for each," and "HMRC sends penalty notices every quarter." There is a margin of tolerance — HMRC "will not charge a penalty if: your FPS is late but all reported payments on the FPS are within 3 days of your employees' payday … [or] it's your first failure in the tax year to send a report on time" — but the same sentence warns that "employers who regularly file after the payment date but within 3 days may be contacted or considered for a penalty." Treat the 3-day margin as a discretionary easement, not a statutory grace period.

Payment rails: Bacs, the SUN and the RTI hash (legacy)

Salary payments in the UK typically run over Bacs as Bacs Direct Credits, carried in the 100-byte Standard 18 record format — "The Bacs standard file/record format used by the Direct Debit and Bacs Direct Credit schemes." Bacs runs a fixed three-working-day cycle: Day 1 input ("Service User submits data to Bacs"), Day 2 processing, Day 3 entry ("The Beneficiary's account is credited …"). Organisations authorised to use the service hold a Service User Number (SUN) — "The unique six digit number allocated to organisations authorised to use the Bacs service." When you instead pay HMRC directly, a bank transfer by Faster Payments "usually reach[es] HMRC on the same or next day," CHAPS "the same working day," and "Bacs payments usually take 3 working days."

There is one RTI/Bacs mechanism worth naming carefully because its guidance is legacy. Where an employer or pension provider pays employees by Bacs using their own allocated SUN, the FPS has historically had to include a 64-character SHA-256 "hash cross reference" — RTI data item 118 — matched by a 4-character random sub-reference in field 7 of the Bacs Standard 18 instruction. HMRC's own guidance stressed the narrow scope: "Generally this requirement will only impact on large employers or pension providers. HMRC does not expect all RTI submissions to include a hash. Employers and pension providers who use different payment methods, including those who pay by Bacs without using their own SUN, do not need to include a hash on their RTI submissions."

Software: what "HMRC recognised" means

You "must get payroll software that reports PAYE information online, unless you're exempt," and you choose from HMRC's recognised list. But recognition is not a recommendation. In HMRC's exact words: "This payroll software is recognised by HMRC. You can use it to report PAYE to us online. You should consider which features you need and check the software you choose has those features. HMRC cannot recommend one product or service over another. We're also not responsible for any problems you have with software you've bought." The point is repeated on the Find-payroll-software guide: "HMRC cannot recommend one software product or service over another and is not responsible for any problems you have with software that you've bought."

The recognised list is split into free and paid products; the free tier "is recognised by HMRC for businesses with fewer than 10 employees" and includes HMRC's own Basic PAYE Tools — free software "for businesses with fewer than 10 employees" that handles "most payroll tasks" but "has some limitations. It is not designed for agents or bookkeepers. Other payroll software is available." Under the hood, RTI is a batch channel: "An employer can file their RTI submission using either the Internet or the Electronic Data Interchange (EDI)." Software becomes recognised by building and testing against HMRC's published payroll technical specifications and test data before it is listed.

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