Important information if you pay via BACS

How will RTI effect ‘electronic payments’?


RTI legislation will have an effect on how the payments are submitted via BACS. If you use bank software you will not be affected by the changes. However if you use a BACS Accredited Software Supplier (BASS) or a BACS accredited bureau service you will be affected by the changes.

If you are unsure if you use BACS as a payment method, contact your provider.

What changes are taking place with BACS payments?


All PAYE and pensions BACS files will require an additional four characters entered into field 7 (spare field) in the BACS submission file, which will be used to identify the payment against the online submission. All the IRIS software will be updated to handle this ensuing that your payments can be made and tracked by the HMRC. However you will need to inform your bank/BACS approved Bureau before you undertake RTI.

Any other payments made by BACS will not be affected by these changes, only PAYE and pension’s payments will be affected.

What do I need to do?


Ensure your BACS provider is up to date

Whether you use a BACS Bureau Or BACS approved software, you will need to contact your service provider to ensure the BACS software is up to date.

Switching to the latest software can take time (in some cases weeks). So make sure you give your provider and bank plenty of notice.


Find out the format your BACS provider requires

If you generate BACS files from your payroll software to submit payments ,you will need to contact your BACS solutions provider to see what format they would like to recieve the file in. This will change to incorporate field 7.

Contact your software provider

Contact your software provider to ensure that they are going to be ready for RTI.

If you pay your employees directly into their bank accounts via the Bacs system (Bacs is not the same as internet banking) using your own Service User Number (SUN) you must check that your payroll software includes the RTI (Real Time Information) cross-reference (sometimes called a 'hash') field. Your IRIS product is RTI ready, your BACS provider may ask you for a test sample file, if this is the case please contact support.

If you pay without using your own SUN you will not need the hash reference even if you pay via Bacs.

More information about the cross reference (hash) field


This field is for a four character reference that you will need when you submit a Full Payment Submission (FPS) and send your Bacs payment instruction. If you use a Bacs Approved Bureau (BAB) you should check with them now to make sure they will be able to supply the reference for this field on your submissions in time for your first FPS.

This reference (or hash) is needed so that HMRC can match the payments employees receive with the payroll data you report in real time. Each employee must have a unique reference and the reference must be in a format starting with '/' to show it is an RTI payment, and then have a further three characters.

What if I don’t pay my employees by BACS?


If you don’t pay your employees by BACS HMRC are not forcing you to do so. They are currently working on how they will receive payments from none BACS employers, but initial thoughts point to it working in a similar way to the existing government gateway.

Further information regarding this can be found on the HMRC website:

HMRC Employer FAQs

HMRC RTI Hash tag FAQs


A list of BACS approved software providers and approved bureaux can be found using the links below:

Software Provider

Bureaux Service Provider

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