RTI Payroll Changes Delayed Until 2026: Summary of Changes

HMRC has recently announced that the planned Real Time Information (RTI) payroll reporting changes, originally scheduled for April 2025, will be delayed until at least April 2026.

This extension provides businesses with valuable additional time to prepare for these significant modifications to payroll reporting requirements.

What Are the Key RTI Changes Being Delayed?

In 2022, HMRC assessed the data it collected from taxpayers, and soon after draft legislation was implemented. This legislation mandated businesses give HMRC more information via income tax self-assessments and employers’ RTI payroll returns.

The most substantial change being postponed relates to the reporting of employee working hours.

Under the new requirements, employers will need to report:

• Actual hours worked by employees
• Contractual hours for salaried staff
• More detailed time-tracking information

These changes were primarily designed to help HMRC verify the actual or contractual hours worked by employees and ensure employers’ compliance with National Minimum Wage regulations.

Additional RTI Requirements Still Planned for 2025

While the hours-worked reporting requirement has been delayed, other changes are still scheduled to take effect from April 2025:

1. Self-Employment Reporting: New requirements for reporting start and end dates of self-employment
2. Dividend Information: Enhanced reporting requirements for shareholder dividends in owner-managed businesses

Unless HMRC announces anything to the contrary, it’s prudent to prepare for the above changes from the start of the next tax year (2024/25).

Why Has HMRC Delayed These RTI Changes?

The delay to the proposed RTI reporting changes has been attributed to several factors:

• To give employers more breathing room and time to prepare them
• Not all payroll software providers can handle new RTI payroll reporting requirements for hours worked yet
• Recognition of implementation challenges for businesses
• Uncertainty around the general election and subsequent new government decisions

Financial Impact on Businesses

The delay provides welcome relief for businesses, particularly small enterprises. Employers now have, at the very least, an additional year to prepare for the new PAYE RTI changes. There is also a chance that the proposed changes may not go ahead at all under the new government.

HMRC’s initial estimates suggested:

• One-off implementation costs of approximately £58 million for UK businesses
• Annual ongoing compliance costs of around £10 million

The postponement gives businesses more time to budget for these expenses and implement necessary changes to their payroll systems.

How Should Businesses Prepare for Payroll Changes?

Despite the delay, businesses should use this extended timeline to:

1. Review current payroll systems and processes
2. Consult with software providers about upcoming updates
3. Plan for additional data collection requirements
4. Train relevant staff on new reporting requirements
5. Budget for implementation costs

Payroll Assistance and Compliance from Accredited Accountants

While the delay provides breathing room, at Hamlyns, we recommend using this time to prepare thoroughly for the changes. Please contact our team today if you’d like to discuss how these RTI modifications might affect your business or need assistance with your payroll operations.

Our dedicated payroll team can help you:

• Prepare for the upcoming RTI changes
• Ensure your payroll systems are compliant
• Implement efficient processes for the new requirements
• Handle your payroll administration professionally and accurately

We’ll continue to monitor developments and keep our clients updated on any further changes to the implementation timeline or requirements. We aim to ensure your business is well-prepared when these changes eventually come into effect in 2026.