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HMRC Basic PAYE Tools - correcting a leaver error?

How to correct an error in BPT, due to furlough extension (Nov'20)

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I wonder if this senario is relatively common and someone familiar with HMRC's Basic PAYE Tools (BPT) knows the right solution...

I'm hoping to help someone who has made an error whilst using BPT to submit their employee payroll for 2020-21. The submissions were fine for tax period 1-7, then an employee was let go and the relevant leaver data submitted to HMRC and P45 issued.

But when the furlough scheme was extended past October 2020, the employer re-hired them immediately (i.e. left on 31st October and re-hired on 1st November). Not knowing what to do they set up a new employee record, which somehow (I haven't thoroughly examined the data yet) has left the employee with tax deductions in tax periods 8-11. They weren't paid enough each month to warrant any tax deductions... and the employer did not even realise the mistake until HMRC sent them a debt chasing notice for the unpaid tax.

They could re-submit the FPS for 8-11 using the old file as a correction, but I'm wondering as the leaver data for this has already been submitted to HMRC whether that will cause further problems?

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By Hugo Fair
04th Aug 2021 19:14

I don't know anything about using BPT but, at the risk of stating the obvious, you need to identify what has been wrongly filed before you can attempt to correct it.

By far the most likely cause (based on the info in OP) is that the 'new employment' was reported using a new 'Payroll ID in this employment' value, but without using the 'indicator' flag to show that this value has changed since last reported.
If so, this has probably resulted in the YTD figures for that person's old employment being 'added' to their YTD figures being reported via the new employment (both with your client) on HMRC's database ... and so their system will say 'tax due'!

As I said, you need to get confirmation from HMRC as to what is being shown at their end before you start filing any 'corrections' (which could otherwise just make things worse)!

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Replying to Hugo Fair:
By MrsNewb
04th Aug 2021 20:02

Thanks for the suggestion. I had a brief look at their data last week, but will be going back to identify the root of the problem this week. I certainly won't recommend re-submitting anything until it is obvious where the tax error has derived from.

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