The Chartered Institute of Payroll Professionals
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For the tax year 2020-21, where additional items relate solely to coronavirus a new P626 is not required. HMRC will add an appendix to the existing enduring agreement.
To add any coronavirus-related items, for example, taxi fares or car parking for staff who needed to work in the office, or computer equipment to enable staff to work from home to an existing PSA, email lbs.compliance@hmrc.gov.uk.
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Corrections to payroll for tax year 2020-21 16 April 2021
As widely reported, the Earlier Year Update (EYU) is no longer a valid submission type for making amendments to the tax year ending 5 April 2021 (2021-21). Corrections relating to that tax year will need to be made using a Full Payment Submission (FPS).
Within the latest edition of the Employer Bulletin there is clarification on several points relating to the submission of an additional FPS to rectify earlier years’ payroll data.
Late reporting reason
Late Reporting Reason H should be applied to all FPS submissions that are used to correct earlier payroll information. This aligns the process with submissions that were received on, or prior to, 19 April.
Payment dates to report
The layout of the FPS remains unchanged and should be updated with the latest payroll information, for example, payment date, monetary values, leaving date etc. As the FPS will be an adjustment to the pay in the tax year then the payment date should be equal to, or later than, the last payment date reported in that year to ensure HMRC records are updated correctly.
An example is provided:
• An employee is employed all year and the final FPS for the year is submitted on 30 March 2019, with a payment date of 30 March 2019. It is then discovered in June 2019 that an error occurred in the Month 11 FPS. The FPS sent to make corrections should include the final pay date of 30 March 2019 and amended monetary values
Correcting employee NI submissions
Following April 2021, corrections to employee(s) National Insurance (NI) contributions for 2020-21 and subsequent years which involve a negative amount, but in situations where an employer is unable to refund the employee(s), then an FPS should be submitted and HMRC written to, to adjust the charge and refund employees. This scenario could potentially arise where an employee has left employment.
When writing to HMRC, the following needs to be included:
• The subject: ‘Overpaid Employee National Insurance Contributions’ • The employer’s name, address and PAYE reference number • The name, date of birth and NI number of the relevant employee / employees • The tax year of the overpayment • How much NI was overpaid / needs refunding • Why the overpayment occurred • Why the employer was unable to pay a refund
HMRC can be contacted in relation to correcting employee NI contributions at the following addresses: One employee correction:
HM Revenue and Customs, National Insurance Contributions and Employer Office, BX9 1AN
The Chartered Institute of Payroll Professionals
Payroll: need to know
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