Payroll: need to know (Latest version)

• 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

More than one employee correction:

HM Revenue and Customs, National Insurance Contributions and Employer Office, BX9 1BX

HMRC will contact employers when the refund and adjustment have been made, and the adjustment will also be reflected on Business Tax Accounts.

The process for correcting tax years prior to 2020-21 has not changed.

Correcting Seasonal Worker payroll using Basic PAYE Tools

The ‘irregular payment’ indicator needs to be selected on all submissions for any Seasonal Workers on payroll from April 2021. This will mean that any future corrections that need to be made using a further Year To Date FPS are reported correctly. If the ‘irregular payment’ indicator is not selected on an earlier submission, and there is the need to make a correctio n, then the question ‘Do you wish to submit this correction immediately?’ should be answered with yes. This can be found on the ‘Add an Employee Payment’ screen, within the ‘Other Details’ section.

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PAYE: PAYE Settlement Agreement (PSA1) 2020-21 20 April 2021

The PAYE Settlement Agreement (PSA1) form for 2021-21 has been published.

The form should be utilised by employers who need to tell HMRC the value of any items included in a PAYE Settlement Agreement (PSA). A PSA allows employers to make one annual payment in relation to the tax and National Insurance (NI) due on minor, irregular or impracticable expenses or benefits for their employees.

The items included on a PSA will not need to be recorded on end of year P11Ds, nor will they need to be processed via payroll.

Employers are reminded to ensure that they select the correct form, as they will be required to record employees separately on the basis of the rate of tax that they pay. Employees living in countries with devolved tax powers (Scotland or Wales) could potentially be subject to different rates of Income Tax.

The form needs to be completed in full before the option to print it is made available. Partly saved forms cannot be saved, so HMRC recommends that all relevant data is collated prior to completion of the form.

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HMRC calculator issues

The Chartered Institute of Payroll Professionals

Payroll: need to know

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