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Basic PAYE Tools not calculating NIC or TAX

Basic PAYE Tools not calculating NIC or TAX

I've a problem with Basic PAYE tools as was expecting NICs and Tax to be calculated for a Director from february 2016 until end of March 2016. That is not happening as I drafted the payment for 31 March today, and still zeroes on NICs and Tax.

Due to lack of work, the Director left the company payroll on 30/09/2015, but then an unexpected job came and he resumed payroll from 12th October 2015. Because of that, he was processed in September 2015 as a Leaver, all FPS submitted, P45 issued when he left.

Please apologise for the length of this, but it might be good to include all the available data on Basic PAYE.

Data of the Director as LEAVER from April 2015 to September 2015:

Tax Code: 1060L

Is this Week 1/month 1 basis: No

Pay frequency: Monthly

Paid on an irregular basis: No

National Insurance category letter: A

Normal weekly hours worked: 30 or more

Start Date: 11/08/2014

Type of starter: New starter without form P45

Is this employee a director: Yes

Date appointed as director: xx/08/2014

National Insurance calculation method for this director: Directors Cumulative Method

With the above settings, this director received 6 Payments of 883.00 each, from 30 April 2015 to 30 September 2015, totalling £5298.00.

Data of the Director from October 2015:

Tax Code: 1060L

Is this Week 1/month 1 basis: No

Pay frequency: Monthly

Paid on an irregular basis: No

National Insurance category letter: A

Normal weekly hours worked: 30 or more

Start Date: 12/10/2015

Type of starter: New starter with form P45

Tax code at date of leaving: 1060L

Date previous employment ended: 30/09/2015

Was this Week 1/month 1 basis: No

Previous pay frequency: Monthly

Last pay period number: 6

Total pay to date in previous employment: £5298.00

Total tax to date in previous employment: £0.00

Is this employee a director: Yes

Date appointed as director: xx/08/2014

National Insurance calculation method for this director: Directors Cumulative Method

With the above settings, the Director received one payment of £560.00 in October plus five payments of £883.00 each until end of March 2016 totalling £4975.00 (the March FPS is not submitted however because it was a test)

By any chance could anyone help? I am puzzled as was expecting Basic PAYE tools to consider the full annual income and then apply the NICs and Tax calculations at least on the last payment of the year.

Thank you

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By hje
03rd Mar 2016 19:18

Looks

right tax-wise.

NIC: Though you should be able to claim employment allowance under 2014/2015 rules thereby negating ers nic.

Thanks (1)
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By JohnLB
10th Mar 2016 15:05

Thank you!

Thanks PM, the figures you published were very handy.

The March FPS calculated by the Basic Paye Tools will now have an accumulated amount of employee NI of £S265.56 which seems ok.

 

Thank you for your help!

Thanks (0)
03rd Mar 2016 21:43

Due to incorrectjy entering leaving date.

Is this the only employee?

As you are showing 2 periods the system is not averaging all income, only that since new start date which is less than a time apportioned annual earnings period.

Talk to online services, roll back to before the creation of P45, and then re-enter later payments without leaving details.

Thanks (1)
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By JohnLB
05th Mar 2016 15:24

Yes it is the only employee.

Thank you for both the above answers.

So, once the £2000 NIC allowance was requested, nothing to pay as employer NICs. Nothing to pay as Tax and finally, the employee is due the amount above as calculated.

Since I have automatic backups, I can roll-back to before the P45, and then I can try re-enter later payments just as they happened.

 

Marion. I am not sure what do you mean by "without leaving details". Of course I should not submit those past FPSs again after rolling back, but do you think that HMRC will accept the final FPS for the March payment?  Is that why you suggest me to talk to HMRC?

Could you please clarify what should be my expectations?

 

Many thanks

Thanks (0)
06th Mar 2016 14:25

Hi John

Sorry for delay in seeing your response.

I suggested talking to online services first as I am concerned the P45 may stop the roll back working, plus I wasn't sure if you would know how to roll back.

Without the leaving details merely meant don't say he left again, as he actually never did.

Your expectation should be that Tools takes all the earnings for the year against a full years earnings period  resulting in Class 1 liability - payable by Director and covered by allowance for employer

 

Thanks (1)
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By JohnLB
07th Mar 2016 12:29

To try to follow your suggestion, I contacted today HMRC that said that I 'just' needed to roll-back to September before the Leaver status and then manually repeat the calculations from then on. I was then passed to a technical staff that asked me if I knew how to roll-back. Since I've got all the backups, and answered I knew how to do that, it seemed to him and myself that nothing else would be needed on that call.

Then I rolled-back, actually to end to end of August, then made the calculation for September and did not submit that FPS. After that, when I tried to calculate October and the following months, I had to opt for the "Exceptionally, add new payment details without submitting the outstanding data" option.

When I did the calculation for January 2016, the employee NIC now is calculated as £53.64. All seems ok, except I couldn't submit that FPS now even if I wanted (submit is not visible, just View, Delete, Export to CSV).

I now guess if I now go for the February and March calculations it will also calculate employee's NIC for this director correctly.

My question now is: the suggested process works, NICs are now calculated, but then how should I proceed regarding the January and February FPSs that were already submitted? Because in this process from September the FPSs weren't submitted, now for January (and possibly for February and then March) there will be no "submit" option available...

What should I do now?

 

Many thanks

 

 

Thanks (0)
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By JohnLB
07th Mar 2016 12:54

Should I submit as late payments?

I wonder I should recalculate from September as 'normal' payments, but indicate them as "Late Submission" + "I wish to explain why the payment data is submitted late" + the option "Correction to earlier submission" and then submit each FPS one by one?

This probably would do the trick, but wonder HMRC will be ok with all this. I certainly do not want to be doing anything they aren't prepared to accept...

Thanks (0)
07th Mar 2016 13:02

Hi there


HMRC have already had FPS submissions so you don't want to send them again.

Now you know removing the leaver details worked, replicate up to an un-submitted month, and then when you choose the option for that month change your choice. It will let you resubmit the amendments before entering the first new one, which should over-write the existing entries. .

Then when you add the  next month it should just carry on as usual but this time get the right answer?

Thanks (0)
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By JohnLB
07th Mar 2016 13:48

Yes, but how do I do it?

Marion, thank your for being so patient.

Till now, I have had the FPSs to the end of February submitted without those NIC amounts calculated.

Ok, after rolling back I can recalculate payments from September up to February. But then in the new January and February calculations there will be the changes on the amount of the employee NIC. How will the Basic Paye Tools let me resubmit the amendments since it doesn't provide a 'submit' option just for these unless I submit the ones that will be outstanding from September to December?

it is the how to do that that makes me a bit confused now.

 

Thank you

Thanks (0)
08th Mar 2016 16:15

No problem

Send them all -  they will just over-write the existing fps so that March will have the right cumulative and the March quarter will show the correct amount payable   

 

 

Thanks (1)
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By JohnLB
10th Mar 2016 15:01

Thank You!

Marion, just did a simple FPS to replace the February one, and this contained the accumulated amounts from September to February, which means that the March FPS will have now the right amounts.

Sorry for the late reply, I was away in the North for a couple of days.

 

Thank you so much for your help!

 

Cheers

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