Enhancing payroll reporting: HMRC’s new RTI requirements

28 June 2024

HMRC is planning to make significant changes to payroll reporting data regarding employees from April 2025. 

What’s changing? 

Employers will be required to include additional information about employees’ hours in their Real Time Information (RTI) PAYE returns. This includes the number of hours worked by each employee during a pay period, provided this information can be determined. If it’s not determined, the reason must be provided.

How is the additional information established? 

This will depend on how the employee’s pay is determined. For example, if the employee is paid based on an hourly rate or a number of hours specified in their employment contract, the employer must report the number of hours worked that determined the relevant payment.

How is this different from current requirements? 

Currently, employers are required to include high-level information on employees’ working hours in each RTI return. The proposed measure will lead to HMRC receiving enhanced information on the actual number of hours that each individual works.

How should employers prepare for the change? 

Employers need to consider the potential implications of these forthcoming changes on their payroll and HR systems. This includes the collection, verification, and reporting of additional data related to hours worked.

Further thoughts

While there are some challenges with this and the professional bodies have raised concerns, the ‘Draft legislation: Improving the data HMRC collects from its customers’ consultation was published by HMRC on 14 March 2024.

For more detailed information, please contact Lee Knight, Susan Ball or get in touch with your usual RSM contact.