RTI payroll changes delayed until at least 2026

Did you know that payroll reporting requirements were set to change in April 2025? The changes were going to be to RTI (Real Time Information) reporting. However, these RTI payroll changes have been put back until at least April 2026.

What are the RTI payroll changes?

Back in 2022, HMRC ran a consultation on the data it collects from taxpayers. Soon afterwards, this was followed by draft legislation. The latter required businesses to give HMRC more detailed information via income tax self-assessment and employers’ RTI payroll returns.

The additional required information was:

• Start and end dates of self-employment
• Dividend income of shareholders in owner-managed businesses
• The number of hours worked by employees.

Reasons for the RTI payroll changes

HMRC particularly wanted employers to report the actual, or contractual, hours worked by the employees. One main reason for this was to make it easier for HMRC to check that employers are paying at least the national minimum wage.

Why have the changes been delayed?

The proposed RTI changes have been delayed to give employers more time to prepare for them.

Part of the problem is that not all payroll software can yet handle the new RTI payroll reporting requirements for hours worked. HMRC has realised this is an issue and, in an August 2024 email to software developers, it said:

“Due to delays owing to the general election and the lead-in time required to upgrade software and processes to prepare for implementation, employers will now not be required to start providing more detailed employees’ hours data through PAYE Real Time Information returns from April 2025. This requirement will not apply 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.”

This suggests that, at the very least, employers now have an additional year to prepare for the RTI payroll changes. It also seems to hint that the regulations – which were introduced during the last government’s tenure – may not go ahead at all.

Either way, the delay or abolition of the RTI payroll changes is particularly good news for small businesses. HMRC has estimated that one-off costs to UK businesses would have been £58 million. It would then have collectively cost firms £10 million per year to comply.

What about the other changes?

While the requirement to report actual or contractual hours worked seems to have been kicked into the long grass, the other two changes will probably go ahead on time. So, unless HMRC says something to the contrary, you should prepare to provide start and end dates for self-employment, plus shareholder dividend data to HMRC via your self-assessment tax return from April 2025.

Do you need help with your payroll?

One way you can make sure you comply with future RTI payroll changes is to let us take care of them for you! Our payroll outsourcing services ensure that your payroll is fast, accurate and fully compliant with HMRC regulations. If you’d like to learn more about how our payroll services work, give us a call today. We’d be delighted to talk you through your options.