Payroll reporting changes to RTI delayed until 2026.

It has been confirmed that HM Revenue and Customs (HMRC’s) planned changes to RTI hours reporting will be delayed until at least 2026.

Due to the time required to upgrade software and processes the delay means that employers will now not be required to start providing more detailed employees’ hours data through PAYE Real Time Information returns until April 2026 at the earliest. Final decisions on whether to go ahead with the regulations and any timelines will remain subject to decisions by the new government.

In March 2024, HM Revenue and Customs (HMRC) published a new technical consultation, detailing the changes to the procedure regarding providing information to HMRC through both Pay As You Earn (PAYE) Real Time Information (RTI) returns completed by employers and Income Tax Self-Assessment returns.

What are the proposed changes?

The proposed changes in reporting requirements will affect employers, directors in owner-managed businesses, and the self-employed. Employers will need to provide more detailed information on employees’ hours paid or a description of the payment through Real Time Information PAYE reporting.

What do these changes mean for your business?

Employers must consider the new regulations that require them to maintain accurate records of employee hours worked to comply with the National Minimum / Living Wage rules. While this information may be readily available for some employees, such as those paid hourly, it may not be as easily accessible for salaried workers whose pay is based on their contractual hours. As a result, employers must ensure that their time reporting records distinguish between worked time, paid time (e.g., holiday pay), and absence time. Larger employers, in particular, will likely need to review their HR and Time and Attendance (T&A) systems to align with these new requirements, which will require collaboration between HR, finance, and payroll teams to assess and potentially adjust current reporting methods and data flow. Meanwhile, smaller employers may face additional manual work to ensure they comply with the new regulations, including recording and reporting worked hours, contractual hours, and payment descriptions for employees.

How can we help?

LB Group has a team of payroll specialists who can assist you with your reporting obligations and provide timely advice. We offer a wide range of outsourcing and flexible payroll solutions. Our services help employers streamline processes improving efficiency, accuracy and performance to meet pressing deadlines.

If you have any questions about the subject raised in this update or require further details on how we can assist you with your Payroll reporting obligations, please email info@lbgroupltd.com or call 01206 867 551, and a member of the team will be pleased to help.