General PAYE News
The FPS replaces the Earlier Year Update 25 March 2019
From April 2020 the Earlier Year Update (EYU), a process that was introduced as part of Real Time Information (RTI), is to be replaced with a Year to Date (YTD) FPS – something that has been called for since RTI was rolled out.
The EYU enables employers to make corrections after the 19 th April, by allowing them to report the delta amounts required that correct figures submitted during the previous tax year – along similar lines to the process previously used when a P14 correction was required. Unlike P14’s however this hasn’t proven to be useful in all instances where HMRC and the employer fail to reconcile year end amounts. In this instance an EYU make be necessary – but what amounts should be reported where both the employer and HMRC believe that ‘their records’ are correct?
By enabling the submission of a YTD FPS, the reporting of year to date totals should remove the uncertainty that prevailed with EYU’s.
During 2019/2020 employers will also be able to submit a YTD FPS where their payroll software has been enabled, equally during this year the EYU can continue to be submitted.
The Software Data Support Team (SDST) has issued an update to software developers, ahead of an update being published in the Employer Bulletin, that seeks to answer some of the more frequently asked questions by the software developer community.
Late reporting reason
The Late Reporting Reason H should be used on all YTD FPS submissions which correct earlier payroll data.
This aims to bring the process in line with submissions received on or before 19th April.
The payment date that should be shown
The format of the FPS isn’t changing and should be completed to include the latest payroll information. I.e. payment date, monetary values; leaving date etc. As the FPS will be an adjustment to the pay in that tax year the payment date should be equal to, or later than, the last payment date reported in that year to ensure our records are updated.
‘For example:
a) An individual is in employment all year and the final FPS for the year is submitted on 30 March 2019, with a payment date of 30 March 2019 b) It is then identified in June 2019 that an error occurred in their Month 11 FPS. The FPS should include the final pay date of 30 March 2019 (as the latest pay date in that tax year) and amended monetary values
Erroneous or generic dates such as 5 April should not be manufactured as this could cause further issues with the integrity of the data on the individual record.’
Earlier Years
The new process will allow for corrections to the 2018-19 tax year and future years. An EYU will still be needed for years 2013-14 through to 2017-18 and as each of these years becomes out of date, the need for an EYU will reduce.
2013/14 to 2017/18 (inclusive) - EYU must be used 2018/19 - an EYU or a FPS depending upon software product used 2019/20 onwards – an FPS must be used
What option does your payroll software offer in 2019/20?
At this time of the year new tax year updates will be issued, if not by now then very soon. It remains as important as ever to make time to read and absorb any changes that have been made so that you understand what your payroll
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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