Frequently Asked Questions About
UK Payroll & Compliance

This guide answers common questions regarding UK payroll administration, Real Time Information (RTI) filing, employee lifecycle management, and statutory requirements.

General Payroll & Setup

Do I need to operate a PAYE scheme?

You must register a PAYE scheme and run payroll if any employee earns £123 or more a week, receives expenses or benefits, has another job, or receives a pension. Even if all staff earn below the Lower Earnings Limit, you must maintain payroll records.

Can I run weekly, fortnightly, or 4-weekly payrolls?

Yes. UK employers can operate weekly, fortnightly, 4-weekly, or monthly pay schedules. Payroll software must process each pay cycle correctly according to HMRC pay period thresholds.

Can my accountant or payroll service provider file RTI on my behalf?

Yes. An authorised agent (such as an accountant or bureau) can submit RTI filings on your behalf using their HMRC agent credentials, provided an FBI2 agent authorisation form or digital agent authorisation is in place.

RTI & HMRC Submissions

What is Real Time Information (RTI)?

RTI is the system HMRC uses to collect payroll data. Employers must transmit payroll information electronically every time employees are paid, rather than filing once a year.

When must a Full Payment Submission (FPS) be submitted?

An FPS must be submitted to HMRC on or before the day employees are paid. Submitting after the payment date can trigger automatic HMRC RTI late-filing penalties.

Do I need to tell HMRC when it is the final submission of the tax year?

Yes. On your Month 12 (or final pay period) filing of the tax year, your FPS or EPS must be flagged with the "Final Submission for Year" indicator to signal that year-end reporting is complete.

How do I receive tax code changes or student loan notices from HMRC?

HMRC issues electronic notices (DPS notices) for tax code adjustments (P6/P9), student loan start/stop notifications (SL1/SL2), and postgraduate loan notices (PGL1/PGL2). Payroll software fetches these directly via HMRC's API.

Employee Lifecycle Management

What is the difference between a new starter and an existing employee on setup?

• Existing Employee:
  

  An employee already on your payroll at the start of a new tax year or system migration. Their prior year-to-date (YTD) earnings are brought forward into the system.

  
  
• New Starter:
  

  An employee joining mid-tax year. Their starter details are captured via a P45 or Starter Checklist (Starter Declaration) and reported to HMRC on their first FPS.

How do I process an employee who is leaving?

Enter the exact leaving date on the employee’s profile before running their final payroll. The leaving date and final pay details will be transmitted to HMRC on the next FPS, generating a P45 document for the employee.

What happens if a former employee returns to the business?

• Returns in the same tax year:
  

  Set up a new employee record and payroll profile to generate a fresh Payroll ID, preventing duplicate record errors at HMRC.

  
  
• Returns in a subsequent tax year:
  

  Re-activate the existing profile or create a new employment record depending on whether the previous PAYE record was fully closed out with HMRC.