RTI - CORRECTING PAYROLL SUBMISSION ERRORS
YOU MUST make sure the payroll figures and details about your employees that you report to HMRC using FPS are accurate. If a mistake is made it’s important that they are corrected. Here are some guidelines:
Correcting errors in employee's personal information
If you have made a mistake on an FPS related to an employee's personal details (for example, you have used the wrong date of birth or surname) you must contact HMRC's Employer Helpline to report the error and make adjustments on your payroll software.
Employee's personal details have changed
If an employee's personal details have changed (for example, their address or surname) you should advise them to contact HMRC to report the change. Employees can update their details online or in writing.
You need to enter the employee's new details on your payroll records so they are reported to HMRC in your next FPS. If you enter the new details on the FPS but your employee doesn't report the changes to HMRC, then the new details will not be updated on your employee's record held by HMRC.
Employee commencement date is incorrect
If you have incorrectly reported the date an employee first started working for you, you should update your payroll records to reflect the correct start date. You must not, however, report the corrected start date on your next FPS to HMRC as this will result in a duplication of the employee's record on HMRC's systems and the possible issue of an incorrect code number.
Employee comes off the payroll
If you have taken an employee off your payroll in error (for example, an employee changes their mind and decides to continue working for you) and you have already notified HMRC of their leaving date on an FPS, you can either call HMRC Employer Helpline or write to HMRC.
Correcting payroll reporting errors
You must send an FPS every time you pay your employees to let HMRC know which employees have been paid, how much they have been paid and the deductions made for PAYE tax and NICs. If you have made a mistake in the current tax year or you discover that information you have already reported is incorrect, the action you need to take depends on when you discover the error.
Errors identified prior to FPS submission
You can either:
- Correct the error by using revised year to date figures on your next regular FPS - this is often the easiest way to handle the correction
- Or show the adjustment by submitting an additional FPS for the pay period for the employee(s) the error relates to.
If the correction necessitates an additional payment to the employee outside of the regular payroll cycle you must submit an additional FPS on or before the date of the additional payment.
If you use the second method, and submit an additional FPS to correct an under reported amount of pay or deductions:
- The 'in this pay period' fields must only contain the difference between what had been originally reported and what the figure should be on that payment date.
- You must update the year to date figures to reflect the correct year to date position for that pay period and previous pay periods
- Bear in mind that a change to a payment amount or PAYE tax deduction may have an additional effect on the employee's NICs if they're near the Lower Earnings Limit (LEL), the Primary Threshold (PT) or the Upper Accrual Point (UAP)
- Make sure that the additional FPS is clearly marked with the payment date it relates to.
- If you submit an additional FPS, your payroll software should work out the correct values that you will be reporting.
Errors identified post FPS submission
If you discover an error after you've submitted a later FPS, but still in the same tax year – for example you notice an error made in month three during month seven - you must amend the error by adjusting your next payroll. However if the error necessitates an additional payment to the employee outside of the regular payroll cycle, then you must submit an additional FPS on or before the additional payment is made. For example, if you find out before sending the FPS for month seven that an employee was under or over reported pay of £100 in month three, you must adjust the month seven 'year to date' figures to reflect the correct year to date position.
Errors identified after an employee has ceased employment
If the error relates to an employee who has left your business, you must include the employee on the next available FPS, showing updated year to date figures reflecting the correct year to date position at their the date of leaving. The original leaving date must be shown again on the FPS.
Correcting National Insurance category letter errors
You can enter up to four National Insurance category letters for one employee on an FPS. In most cases, the category letter you use at the start of the year will be the same for the whole year. If you discover that the wrong National Insurance category letter was used for an employee on an FPS you have submitted, you should on your next FPS:
- Make an entry in all the National Insurance data fields, even if it is zero , for the incorrect category letter.
- Enter the correct category letter and show for that letter the correct year to date National Insurance data
Reporting errors on an EPS submission
If you have recovered statutory payments or received NICs compensation on:
- Statutory payments
- Construction Industry Scheme (CIS) deductions suffered
- The amounts you have claimed under the Regional Employer National Insurance Contributions (NICs) Holiday for New Businesses,
then you will have recorded these on an Employer Payment Summary (EPS). If you have made a mistake on an EPS in the current tax year, you should submit another EPS to show the correct total year to date figures. Finally, you must always show correct total year to date figures on the EPS. You should not show the difference between what was originally submitted and what the figure should be.