FPS or EPS?

FPS or EPS?

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I have a client, just the one employee, who didn't receive any pay in April.  My understanding was that under RTI there would be no FPS to file, but instead there would be an EPS. It seems that Moneysoft, however, requires me to file a 'nil' FPS and there is no option to file an EPS. Is this correct?

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Quack
By Constantly Confused
08th May 2013 12:53

Rightly or wrongly

We have just not sent anything in if there was no payment made.  We ummed and erred about whether we needed to do an EPS as our software provider instructions were very unclear, but eventually decided it wasn't needed.

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By thisistibi
08th May 2013 13:27

HMRC guidance says pretty clearly that EPS is required if no payments are made to employees in a pay period.  I'm not saying that's the right answer, just that it says it in certain terms.

I would have thought a nil FPS would be acceptable, the difference being that an FPS file will contain employee details with no payments associated with them, whereas presumably an EPS doesn't contain any employee details.

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By onicholson
08th May 2013 14:43

An FPS with zero pay is sufficient. A nil EPS is only needed if you didn't send any FPS's at all - it isn't important how much pay went through the FPS's, the only important fact is that one was sent.

There's no advantage one way or the other, particularly for the small 1-2 employee companies, but you must file something for each month (unless you're an annual scheme). Doing nothing will make HMRC chase up the submission at some future point.

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By andy.partridge
08th May 2013 15:16

Odd

If a 'nil' FPS is sufficient why would HMRC go to the trouble of stating that correct procedure is an EPS, something that most small businesses would otherwise never need to file? Surely the sensible thing would be for the 'nil' FPS to be the correct procedure in the first place? And why had Moneysoft adopted a procedure that is not part of HMRC guidance? Perplexed!

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By onicholson
08th May 2013 15:26

There isn't a nil FPS, though Moneysoft may call it that. You can send an FPS with zero pay this period and current YTD figures (which may be zero too), which is probably what Moneysoft refer to with the nil FPS. In this case zero is not the same as nil.

If it's easier in Moneysoft to do the 'nil' FPS, do that. However, sending an FPS does require that you have an employee. If you have no employees at all you can't file an FPS as it relates to specific employees and you must use the nil EPS instead.

There are similar cases all over the rules for PAYE. Each software provider makes a choice on how to handle the rules and some may be entirely automated by your software, which means that you don't need to pay any attention to them, but that doesn't mean that HMRC can neglect to tell you that the rule exists.

Moneysoft's answer isn't a case of not being part of the HMRC guidance, it's just a detail of how they process zero payslips.

That's also why the best first stop for information is often your software provider instead of HMRC - HMRC will give you the standard rules, your provider will give you the practical steps you follow to meet the rules with that software.

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Quack
By Constantly Confused
08th May 2013 16:24

I stand corrected

Not just by everyone else in this topic, but also by our payroll department who say I got the wrong end of the stick.

Serves me right for thinking I knew something ;)

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Euan's picture
By Euan MacLennan
08th May 2013 17:06

First FPS

I suspect that why Moneysoft permits a "nil" FPS in Month 1 (and why HMRC accepts it) is that it is not just a FPS, but also an EAS (Employee Alignment Submission).  If you just filed a nil EPS in Month 1 (2,3,4, etc.), HMRC would have no idea what employees you have on your payroll.

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Replying to carnel81:
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By onicholson
08th May 2013 17:17

Euan MacLennan wrote:

Euan MacLennan wrote:

I suspect that why Moneysoft permits a "nil" FPS in Month 1 (and why HMRC accepts it) is that it is not just a FPS, but also an EAS (Employee Alignment Submission).  If you just filed a nil EPS in Month 1 (2,3,4, etc.), HMRC would have no idea what employees you have on your payroll.

Actually, that's an odd detail of how the system works. For example, if you have a scheme that won't pay anybody until month 6 you're expected to do a nil/inactivity EPS to cover the first 5 months and then submit a first FPS in month 6. HMRC have no idea who's employed until you send your month 6 FPS. In extreme cases you may have no payments at all all year, which means you don't align any employees.

It does seem wrong but it also fits in with their general approach to new employees. Starters are only included in an FPS, which means you don't file them until you pay them. If someone joins the company but remains unpaid for a period then you won't file their starter information until much later.

Moneysoft's nil FPS is likely just a zero value FPS, which is always acceptable through the year. It also means that you can tell HMRC about new starters before they get paid.

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