Compliance
full payment submission (FPS) for the employee. The YTD figures can also be amended by sending an extra FPS prior to the date that the next regular FPS is due. The following steps need to be taken: ● update ‘This pay period’ figures with the difference between the original, incorrect amount and the correct figure ● correct the YTD figures ● record the same payment date as in the original FPS ● record the same pay frequency as in the original FPS ● include ‘H – Correction to earlier submission’ as the reason in the ‘Late reporting reason’ field. Where an overpayment has been made to an employee in the current tax year, in a previous pay period, every attempt should be made to roll back the system to the period when the overpayment occurred, in order to adjust the pay accordingly. This will result in subsequent adjustments in following pay periods, ensuring that the net figure to be repaid by the employee is correct, and the right liabilities applied. Where an overpayment is made in error and the individual in receipt of that
money is still included on the payroll, there is a common misconception that the money has to be paid back in full by the employee prior to adjustments being made to the payroll. As long as there is a clear overpayment process in place, the relevant corrections to payroll software can be made in relation to that overpayment. ...agree (where possible) on a secure repayment plan... If the overpayment has been made to the employee in a previous tax year, then for tax year: ● 2020/21 and after, a FPS will need to be submitted ● 2018/19 or 2019/20, either a FPS or an earlier year update (EYU) can be submitted ● 2017/18 or earlier, an EYU must be submitted. Note that the option to send an EYU was removed for tax year 2020/21 and subsequent tax years. HM Revenue &
Customs’ Basic PAYE Tools (BPT) has been updated to reflect this change, as confirmed in the February edition of the Employer Bulletin (http://ow.ly/7YDQ30rG8H2).
Conclusion It is apparent that resolution of
overpayments is not as straightforward as it may appear. It is not as simple as just deducting money from current staff, or requesting repayment from former employees, as communication plays a fundamental role when overpayments occur. The CIPP recommends that employers ensure that contracts of employment include clear details pertaining to the process surrounding overpayments. We also encourage employers to liaise with those who have been overpaid, and to agree (where possible) on a secure repayment plan, which both parties should sign. This will allow the payroll department to adjust payroll software accordingly, the business will receive the money that it is owed back, and there will be a substantially lowered chance of any legal action being taken by the impacted employee in the future. n
CPD 15 points
NEWTOPAYROLLANDWANT TO STANDOUT FROMTHECROWD?
UPDATED FROM 2021-22 BUDGET
Designed for those new to payroll, or those who wish to improve their working knowledge of payroll processes, this qualification covers the core skills required to administer the payroll function. Includes five dynamic units: ● Calculating National Insurance contributions (NICs) and gross payment apportionments ● Taxable pay and PAYE income tax calculations ● Statutory Sick Pay (SSP) calculations and administrations ● Child-related statutory payment calculations and administration ● Administering statutory deductions and additional payroll obligations The Payroll Technician Certificate meets the industry’s rapidly evolving requirements for knowledgeable payroll administrators.
£1595.00 +VAT*
Enrol today at cipp.org.uk/study for a start in July
*Price correct at time of print
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| Professional in Payroll, Pensions and Reward |
Issue 71 | June 2021
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