I’ve recently seen that several SAP customers in the UK, who are live with RTI, still do not comply with RTI rules on their BACS file without even being aware of it. So, I thought I write this quick little piece to encourage you to check and possibly amend your system.
You are probably aware that HMRC requires a unique reference key to link each salary payment in your BACS file with the respective line on your RTI FPS submission. Some special BACS formats used for online banking in some cases are still exempt from this rule, as the banks are working on their format, but they will also have to become compliant soon – if in doubt, check with your bank and / or HMRC.
If you are using the normal, full BACS 18 format, you should be compliant already: as the following table shows, the RTI reference is expected in positions 32 – 35 between your organisation’s account number and the amount paid:
1) So, the first step would be that you go into DME management and check a few payments in your BACS file. If you don’t know how to do this, because you are not usually dealing with payments, ask a colleague from your finance team to help you.
This picture shows a typical line in a BACS file with the RTI reference missing in the indicated position:
If you find the reference there, then you are probably set up and fine. You may still compare with the payroll results as shown in the next step to be sure and understand the principle better.
If you don’t find the reference here, then there might be something wrong on the payroll side (see next step), but you probably have an issue with your BACS format and you need to talk to whoever is responsible for configuring that, probably in the FI team.
2) The second step is to check the reference in your payroll results. Note that it will only be generated in there by running the pre-DME program, not by payroll itself. (That’s why you are guided to always run the pre-DME program before running the FPS in RTI)
The reference is in the table RTI of the payroll result in the position indicated by a red pen in this picture:
If you can’t find a reference here, then there is an issue on the HR end, which needs repair. The most likely causes for missing the reference here are:
– You didn’t run the pre-DME program yet
– You ran the pre-DME program without selecting any wagetypes. While this works for the DME, as all relevant wagetypes are there, the program doesn’t create the reference.
– Feature GBIT9 indicates that this employee is not being paid by BACS
I haven’t seen any customers, where the reference is not working fine on the payroll side, but there are still quite a few customers. where the BACS file is missing the reference..
Avoid issues with HMRC later by making sure the BACS file is really correct now.