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P11D, EXPENSES AND BENEFITS TRAINING COURSE COLLECTION With fines reaching up to £3,000 for each incorrect P11D submitted, these courses cover everything you need to know to stay compliant. Whether you’re new to payroll, or just looking for a refresher; pick the course elements you need to tailor your learning.
an NI number, but let’s leave that particular discussion for another day. Did you also know there are many employees who are recorded as being on NI category letter C but who are not of state pension age? A couple of things for you to ponder upon. You’d be forgiven for thinking that surely it can’t be too hard to get a name and date of birth correct, especially as you hope the employer has carried out the correct checks (including a right to work check) prior to employment. But HMRC data includes multiple cases of people called ‘A N Other’ or with surnames such as ‘Unknown’. When it comes to dates of birth, there are many employees who are apparently under one year old or over 100. Sometimes the system’s ‘default’ date of birth is used, or every employee at a company has the same date of birth. How could APIs help with data quality issues? A few years ago, pre-MTD, there were some brief discussions on how the data held by HMRC could be brought directly into payroll. It would eliminate mistyping of names, addresses and dates of birth. Tax codes, NI numbers (if applicable) and NI category letters to apply would go straight into the payroll software. P45s would also disappear. The idea was that, through using APIs, the employee would give the employer (or payroll agent) a code / token to be entered onto the payroll system. Payroll would then be authorised to collect the data on that employee directly from HMRC. This would use the employee’s personal tax account information. A similar code / token system is used if you hire a car in Europe. It allows the car hire company to check your driving licence details directly with the Driver and Vehicle Licensing Agency. The code is valid for a certain number of days. As previously stated, RTI is a one-way street. Your payroll software sends the data to HMRC but there’s no information on how, or when, that data has subsequently been processed at HMRC’s end. HMRC only updates its systems a couple of times a month, so business dashboard values don’t always align to the payroll system. This can cause issues, including misallocation of payments. Using APIs, it could be possible for payroll software to bring in what’s been
received and processed by HMRC in actual real time for payroll software and for HMRC. If there was a mandated data standard and APIs available to all pension providers, other data issues which occur between payroll software and pension providers could be resolved. I know of cases where the data is manually entered onto the pension system, meaning that it can be incorrectly entered, as numbers can easily be transposed. Even where an Excel / csv file is used, data corruption can occur. If there was an API link, not only would the data be securely transferred, but it would also be exactly what was calculated in the payroll software. In addition, as APIs are two-way, pension providers could securely update the payroll software when a member changes their contribution or ceases to be a member of the pension scheme. It would also enable pension providers to obtain accurate information so they can match ‘old’ pots to the correct individuals. Having APIs available to both HMRC and pension providers would help payroll professionals as well, as you: l would have more confidence the data is correct l wouldn’t have to keep chasing people for their details l could confidently run payroll and know that the exact same (relevant) data is being securely sent to both HMRC and the pensions provider. With the payrolling of benefits set to become mandatory, the pressure to provide even more information to HMRC will undoubtedly increase. Therefore, it would be great to see APIs in place to help employers, employees and payroll professionals fully understand what’s being sent to HMRC and what impact it will have for both the employer and employee. Wouldn’t it be great if there were APIs which could enable all the data to be available to everyone as soon as payroll has been run and paid? This would mean everything could be fully connected and up to date for employer, employee, HMRC and pension provider all at the same time. As a result, because everything would be up to date, the employee could not only check their payslip via the employee app but could also see their pension details. The employee app would also be able to link into the pensions dashboard, giving them insights on all their pension pots, allowing greater visibility and control of their long-term financial future. n
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| Professional in Payroll, Pensions and Reward |
Issue 99 | April 2024
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