How FreeAgent supports RTI

This article provides an overview of RTI (or Real Time Information) and how FreeAgent supports it. 

Since 6th April 2013, employers have had to report wages, salaries, PAYE and National Insurance (NI) to HMRC in real time.

Please note that FreeAgent's payroll functionality won't be available if you have an unincorporated landlord or non-UK account type, or if you're preparing your accounts using cash basis accounting.

RTI applies to employers and limited companies

Real time information (or RTI) applies to anyone who is registered for PAYE, or needs to be. This means that if you employ staff or you work through a limited company that pays you a salary, RTI applies to you. If you are a sole trader or a partnership and don’t employ staff, then RTI does not apply to you. You might also want to check out HMRC’s guidelines.

Find out the difference between RTI, FPS and EPS payroll submissions.

How RTI works in FreeAgent

When you run and report payroll each month, FreeAgent reports your PAYE and NI in real time to HMRC. The payroll page for that month will then be updated to show that your RTI was filed successfully.

Year End (Month 12) Payroll Submission

Making your final (Month 12) submission is very straightforward in FreeAgent. Run and report Month 12 as usual and FreeAgent will send an FPS (Full Payment Submission) to declare your pay and close down your payroll year. If you're expecting to see a series of Month 12 questions, don't worry, these are no longer required by HMRC.

If you file RTI late, you need to provide a reason

If you file RTI late, you will need to choose a reason from a list provided by HMRC before you run and report that month's payroll.

Making a new monthly submission after the end of the tax year

If you have been using FreeAgent for payroll but haven't made all the submissions for the previous tax year, FreeAgent will automatically send a further Full Payment Submission (FPS) when you run your payroll.

This will apply if you need to make a payroll submission for the previous tax year after 19th April. Find out how to file missing payroll submissions after the end of a tax year.

Once you have done this, you will see confirmation that a Full Payment Submission has been submitted in the 'Payroll Summary' panel in FreeAgent. If you need to make corrections in a previous tax year, find out how to make a payroll correction for a previous tax year.

You may be handed a penalty for filing RTI late

For more information, take a look at HMRC’s explanation of the penalty system.

Due a repayment of PAYE and NI?

There may be times when you are due a repayment from HMRC for PAYE and NI. If this is the case, you will usually need to either deduct the amount you are owed from your PAYE/NI liability in the following month or contact HMRC's employer's helpline to request a refund. Further information is available at gov.uk.

Closing payroll scheme

If you wish to submit an EPS to close your pay scheme, find out how to close your payroll using FreeAgent.

Getting started

If you are preparing to use FreeAgent’s payroll for the first time, make sure you’re registered for PAYE online with HMRC first, then follow the steps in our guide to setting up payroll. You might also find it helpful to take a look at our frequently asked questions.

FreeAgent’s payroll feature index