Why do HMRC have a different FPS liability to the amount I sent?

Why do HMRC have a different FPS liability to...

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I made an FPS submission after our August payroll, and received a letter from HMRC a couple of weeks later telling me I had underpaid, as the liability they have is more than I submitted. I checked our payroll figures, and confirmed that I had paid exactly what our FPS stated - which agrees with the P32 from payroll. There was no SMP involved, or anything else that I know about which would have meant I should have sent an EPS to reduce liability. There is a difference in tax, NI, and student loans, amounting to just over £400 in total. I am running Sage 50 payroll. I have spoken to Sage, and they say what was sent from Sage must be what HMRC received, so the liability must be for something else, but HMRC don't seem able to give me a breakdown of the liability by employee so that I can reconcile their figure with mine. Has anyone come across this before? I have no idea where to go on this, and I don't want to just pay the shortfall without knowing what it's for. Thanks for any help anyone can give!

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By Kelly_1986
16th Oct 2014 09:34

The whole thing is a complete joke.  Have had this with a few clients, very long & drawn out process we've got to the point where we have sent a fee to HMRC for our time with this.  Basically the paye dashboard is incorrect, it is useless.  If you start receiving underpayment notices for amounts you don't think are due then call the employer helpline and they will send it to the disputes team, you'll have to keep an eye on the dashboard though as no-one will contact you.  If no further forward after that then send a complaint in writing.  Don't pay anything which you don't think you are due and also don't expect the dashboard to display what you have filed they put in paper entries to bring up the payments to correct.

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Euan's picture
By Euan MacLennan
16th Oct 2014 09:54

You could write to the Employers PAYE Office at Longbenton, enclosing prints of your August FPS, together with the HMRC acknowledgement (I am not familiar with Sage 50 payroll, but I assume that it produces these reports), and of your online PAYE account, and ask them to explain the discrepancy and/or to amend their incorrect entry on your PAYE account.

If it is not resolved within 30 days, send a letter headed "Complaint" to Longbenton with a copy of your first letter attached.

Phone calls can get "lost" - if you write, you have evidence.

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By rjoconnor81
16th Oct 2014 13:06

Penalty?

The amount is similar to a four month non submission of year end penalty/P11d (£400.00 + interest).  I'm not saying it hasn't been completed, just that HMRC are making loads of mistakes.  

Might be worth looking into.

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Euan's picture
By Euan MacLennan
16th Oct 2014 13:48

Online PAYE account

I was assuming that you had access to your online PAYE account.  If so, it provides a comprehensive analysis of the amounts due for each month.  It is easy to see if any penalties or interest have been included and indeed, to check the tax, Ee's NIC and Er's NIC, all of which are shown separately, against your payroll records.

If not, I would suggest that you register for online PAYE for Employers immediately.

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Replying to gerrysims:
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By Thornbury
16th Oct 2014 14:10

On line account

HMRC have withdrawn the ability to register for the "Employers Dashboard" A new system is due to replace it in April 2015.

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Replying to johnhemming:
Euan's picture
By Euan MacLennan
16th Oct 2014 14:46

Really?

Thornbury wrote:

HMRC have withdrawn the ability to register for the "Employers Dashboard" A new system is due to replace it in April 2015.

I am sure that HMRC have not withdrawn the ability to register for PAYE Online.  Are you saying that if you do so now, the View Account link is disabled?

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Replying to marks:
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By Thornbury
16th Oct 2014 15:15

Yes

Euan MacLennan]</p> <p>[quote=Thornbury wrote:

HMRC have withdrawn the ability to register for the "Employers Dashboard" A new system is due to replace it in April 2015.

I am sure that HMRC have not withdrawn the ability to register for PAYE Online.  Are you saying that if you do so now, the View Account link is disabled?

[/quote

You can register for PAYE online, but setting up visibility of your account has been stopped. When you try to do so, you get the error message that you have either already registered or the data entered is incorrect. I kept getting this message when trying to set up to see Clients data and rang HMRC helpline. You can see existing accounts though]

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By DMGbus
16th Oct 2014 13:52

Go online access online PAYE account

To locate differences, where the total difference is known but not how made up, I find that logging into your PAYE a/c online can identify totals for Tax, Student Loan, NIC holiday, SMP recovery and NIC.

Although this will not access data for individual employees it will ID the difference per category of liability or credit, which can be helpful.   As a recent example HMRC liability was less than P32 liability.  Going online showed that at HMRC end they had credited student loan liability to the online account rather shown it as a charge.

A current issue I see is that credit for Employment Allowance has for the past few months been late being credited to online figures, not being credited until after the PAYE/NIC due payment date.

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Replying to dl100tr:
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By schoolaccountant
16th Oct 2014 16:55

thanks, but...

I had already checked the on-line account, and there is a difference in tax, NI and student loan - it's almost as though they have another (unknown to me) employee in there. The employer helpline (when you can get through to them) can't seem to give a breakdown by employee, which is what would help me most.

Thanks to all for the various replies - I think I'll take up the suggestion of getting something to them in writing (at least I won't be kept hanging on the phone for another 30 minutes or so waiting for a reply....)

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By jholmes
20th Oct 2014 11:56

Had a similar problem

I had a similar problem in the 13/14 year with the dash board showing different figures to what i had submitted. It turned out that the issue was due to changing software from QB to Sage. Basically HMRC confirmed to me that RTI cannot cope with a company changing software part way through a year. I had them confirm they would stop sending chasing letters until the ye could be processed and then they would rectify it with the p35 submission. If I look at it now i can reconcile the YTD but not each month.

This took about 5 months of phone calls and speaking to different teams, including one very rude person who decided it had to be my fault and wanted to know why i didnt know what had been submitted each month. When i explained i knew what was submitted i just didnt know how they had allocated it he refused to believe me! LOL.

It could be you have changed software or perhaps a major update has thrown it off, though i will say i use sage and so far my 14/15 year is fine.

 

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By Kazmc
20th Oct 2014 12:23

.

Just a thought but do you have many employees with student loan deductions?

If not that could be the starting point to see if a duplicate employment has occurred.

See if the differing amount is the same as an actual student loan you were expecting and then see, if you have an audit trail, if anything has been amended on that persons record that could have triggered a duplicate employment eg date of birth, date of commencement.

Not sure if this helps but maybe worth a look?

It is utter madness that we are reduced to this amount of work to sort out HMRC's incompetence

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By mikegabb
20th Oct 2014 12:43

Period allocation

I've had a few of these, usually some or all of the payment has been allocated to another period leaving a shortfall in the period the client has tried to pay. 

If the client is behind with payments it can get allocated to the last completed period rather than an older one that they were meaning to pay, but conversely payments can sometimes be allocated to the oldest outstanding period!

For example if P11D's were submitted, an additional liability in the previous tax year can swallow up payments intended for this year.

 

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By Samantha20
20th Oct 2014 12:51

I had a similar problem -- it turned out that HMRC had included an employee twice in a month in 2013/14.

I only found this out after I rang them and told them that there was a discrepancy and they forwarded the case to another team.  That team rang me a couple of months later and gave me a breakdown by employee.  

I thought that that was the end of the matter but for some reason they still didn't amend their records so I was then chased for the outstanding balance in this tax year.  I explained to the person chasing me that we did not owe this amount and they asked me to speak to their helpline.  I told him in no uncertain terms that I had already done everything I could and wasn't going to waste my time trying to sort it out again.  He insisted that I had to otherwise he said that I would be chased for it every month and we had quite an argument.  I said that if he wanted to waste his time and mine chasing a balance that was not owed each month then there was nothing I could do and left it at that.

I was very surprised to receive a call from him a few days later telling me that he had resolved the problem and when I checked the amount was indeed no longer showing on the account.

 

 

 

 

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By DMGbus
20th Oct 2014 13:23

Specific issues

Early on in 2013/14 I did have one case where the liability overstatement for one employer was equivalent to the PAYE (but not NIC) liability of one employee (out of four)

After an hour or so of phone calls it was resolved.  No apology or explanations why it had happened from HMRC was forthcoming for their error in this respect.   Collector of Taxes had total (overstated) figures - totals that agreed with online account. Collector of Taxes had no access to breakdown of figures.  HMRC Employers Office had correct figures (and breakdown of individual employee amounts) and couldn't understand why there would be a difference.

It subsequently transpired that FPS / EPS data initially goes into a system with Employers Office and has to then get transferred / mapped to Collector of Taxes system.   I have seen no explanation how this transfer / mapping of data is done by Employers Office to Collector Of Taxes, speculation being that an army of computer operatives copies and pastes data from one HMRC system to another, hence prone to error.    Anyway, not seen a repeat of this error since, so HMRC have presumably put measures in place to prevent a re-occurrence.

 

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By SimonLever
20th Oct 2014 13:35

It would be interesting....

.. to see how HMRC would approach the above if instead of hanging on the Employers Helpline everyone refused to pay what was asked and when action was taken to recover "upaid" tax and NI a court hearing was asked for.

If HMRC had to attend court for every collection and it could be proved the amount was not due they would have to consider the wrath of the judge, a claim for costs every time and long delays in getting to court as the system would be clogged.

It might actually get them to sort their software out rather than relying on us to do it for them. 

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By sinniw
20th Oct 2014 13:41

RTI Errors

 

Sage have advised HRMC of payments from week 22 as Month 5 when it should be in, according to P32, Month 6.

 

We have received letters, phone calls (you must phone back by 8pm or else) and now interest on a supposed late payment.

As far as getting the interest back I got fed up of waiting on the Employer Helpline. I am not giving this one up however....

 

Any ideas where to go next?

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Replying to DSG:
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By onicholson
20th Oct 2014 13:52

Payday

sinniw wrote:

 

Sage have advised HRMC of payments from week 22 as Month 5 when it should be in, according to P32, Month 6.

What was the payday for week 22?

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By sallyrichardson
20th Oct 2014 14:38

This Happened to Me with FreeAgent!

Hello,

 

You are not alone! I took over a client and started using FreeAgent instead of Basic Tools last month. HMRC "received" figures their end where £200 jumped from Employer's NI (covered by Employer's Allowance) to Employee's NI  - therefore they demanded £200 extra! It has now been deferred to their  dispute team. The first person I spoke to did not understand and said he had never seen such a problem. When I called back with YTD figures the second person said this happens all of the time with various different types of software.A nightmare to have to explain to a new client, and such a waste of time!

This second person said that if anyone tried to chase the debt you should tell them to check all of the notes on the account -as often other departments don't read them all! Unbelievable.

Good luck with getting it resolved. I have taken screen prints of FreeAgent with all of the IRs to prove they have accepted it etc, just incase ours isn't resolved.

 

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By PracticePartner
20th Oct 2014 15:26

Had a couple of these ...

... and ended up resubmitting the FPS although I could prove they were correct in the first place, it was easier than going round in circles with HMRC

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By Vince54
20th Oct 2014 21:10

Payday

Week 22 includes paydays from 31st August to 6th September inclusive.  Therefore unless the payday was 6th September, Sage has correctly allocated the PAYE due to tax month 5 (6th August to 5th September) which should be paid over by 19th/22nd September.

I've seen examples of payroll systems matching tax weeks used for determining free pay to the incorrect PAYE tax month.  Main reason appears to be that they don't take account of the contractual payday.

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By Kate Upcraft
21st Oct 2014 07:48

Pleas, please rasie a disputed charge

FPs files are still being corrupted on receipt and duplicate records are created due to HMRC's core RTI system design. Once the duplicate is created it will flow across to ETMP which is the accounting system behind the dashboard and overstate the liability. ETMP is also acting unpredictably in allocating payments received to the wrong month and wrong scheme so when you put the two together....and of course as soon as there is a duplicate record the taxpayer is given an incorrect BR tax code.

So if you have an incorrect liability showing on the dashboard as many thousands of schemes do you need to ask the employer helpline to refer you to the disputed charges team who can then put a marker on the scheme to stop GNS, penalties and field force activities whilst the discrepancy is investigated - which will take months. If you don't log it formally then come April 2015 there is the potential for automated payment penalties. In August HMRC sent out letters to all schemes it recognised as in dispute for charges for 14/15,13/14 and 12/13 (pilot year) if you didn't get one you are not formally in dispute and compliance activity will continue

Kate Upcraft

Chair RTI Stakeholder Group

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By psimonparsons
23rd Oct 2014 00:26

Raise a dispute charge case!
Declaring my interest. I am the current chair of IREEN, the electronic exchange with government user group,

If you believe that you have paid over the correct amount, then request a dispute charge case be raised. This will then have specialist team look into the discrepancy and stop the chasing of any debt. This can take a number of months to resolve.

HMRC debt management will assess payment in relation to the declared payment date on the FPS. The earlier claim of tax weeks being in the wrong tax month is nonsense. Software does not stipulate or determine. The judgement of where it falls is based on the payment date on the FPS.

The common areas of cause relate to duplicate record creation: change of name; payments after leaving; change of start date or leaving date; resubmission of FPS where there are leavers; movement of employees from one pay frequency to another; change of supplier or submitter; change of payroll ID without sending a change marker and the former payroll ID.

Equally, the HMRC systems apparently are not clever enough to know that statutory payment reclaims are at least 92% of SMP, SAP, OSPP or ASPP and may even be 103%. Employers with any reclaim are expected to file an EPS for every period from when a reclaim has occurred, even if there is no additional amount. The EPS filing is for the whole PAYE scheme and not just a sub frequency.

Mistimed payrolls are also a cause. Tax months run from the 6th to the 5th. If the declared payment date is not matching, then amounts are accounted in the relevant tax period.

As an example, if the payment is normally made on 6th of the month but is brought forward because of weekend to the 5th, and the employer declares the 5th, then there are two payments due in one month. HMRC actually require the normal date to be reported, not the change date, but many employers make an inadvertent error.

There are many and varied reasons why HMRC systems will misbalance with the payroll and actual FPS submission.

Equally do not ignore contact, else you will experience threatening debt collection activity - raise a dispute charge case and check your payment date reporting.

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By schoolaccountant
23rd Oct 2014 09:18

I've now raised a disputed charge referral

Thanks for all your replies - it's good to see I'm not the only person with this problem. I've investigated the various issues raised, and I still can't see where the discrepancy has arisen.  I have raised a disputed charge with HMRC, although they say there's no timeframe in which they answer, so it could take months. At least I can forget about it for a while now, in the knowledge that I'm not going to be chased for the supposed shortfall in payment.

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By Vince54
26th Oct 2014 15:36

Raise a disputed charge

@ Simon Parsons

While agreeing that it's not the software that determines the tax month in which a payment date falls, some payroll systems do produce such schedules which may be misinterpreted.  This was the point I was trying to make (obviously not very well!).

The schedules may be produced, for example, to link pay periods to accounting periods.  On another forum I've seen such a schedule apparently linking tax week 5 to tax month 2 and the payroll manager querying why HMRC have raised an underpayment notice.  Tax week 5 covers paydays in the period 4 - 10 May and so HMRC would include the figures on a FPS with a payday of 4th or 5th May with any other FPSs with paydays of 6th April to 5th May.

I was trying to give HMRC the benefit of the doubt for once (don't ask why, probably going soft in my old age!) by suggesting another alternative for the underpayment notice.

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Morph
By kevinringer
30th Oct 2014 13:38

Resubmit

We've had this problem several times. We use Moneysoft. We have been told by HMRC to resubmit. So that is what we've done (there's an option in Moneysoft to resubmit). In a few of the cases we've heard nothing further from HMRC so assume they are now happy. But we still have a couple of cases rumbling on.

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