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How to correct multiple PAYE & CIS errors

How to unravel this mess?

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I've taken on a new limited company client - he has ran his own payroll and CIS scheme - I'm hoping for tips on how to unravel the mess he's got himself into:

2015/16 - no payroll - client reported most of the CIS deducted from subbies but not all and some in the wrong period. Also failed to report some CIS suffered. 1. What's the best way to report correct amounts? File late / amended CIS300 reports / EPS? Or can I file EYU (not sure if that is only for PAYE and not CIS)?

2016/17 - director only on payroll and has paid some tax and NI - almost all monthly payroll submissions are wrong. Seemingly not submitted from Xero as planned. Again several of the CIS300's reported are wrong value / wrong period.

2. Shall I submit correct FPS's for each payroll month? Will this result in several penalties?

3. Shall I submit just one additional FPS with correct YTD payroll values?

4. And if I submit corrected CIS300's will the corrected values over-write HMRC's incorrect values? Will multiple penalties be issued?

There are currently lots of estimated PAYE demands showing on the online PAYE account. Client has paid most demands as they arrived believing he was keeping everything up to date.

Thanks, any tip appreciated.

Replies (8)

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By chewmac
06th Feb 2017 14:02

Ok, so I'm making some progress on this. Seems that CIS is sorted out separately over the phone.

I'm very confused on how to correct the client's PAYE account. There are several months where HMRC have raised specified (estimated) charges for PAYE/NI. Some I can clear by submitting a £nil EPS where applicable.

However, client used Xero to process payroll and neither of us have access to that now.

What happens if I use my software to submit FPS's for months that the client has already made submissions and I don't use the exact same payment date (because it's unknown what payment date was reported from Xero)?

I think I can that I will be adding to problems doing that and not correcting anything.

I don't understand therefore the following: When submitting a corrected FPS it's usually only the latest that needs submitting. The client's last FPS was in fact correct - i.e correct payment date, correct tax month and YTD values.

If I don't submit any correcting FPS's for the months that specified charges have been raised. How are the specified charges cleared?

Also, just because the directors PAYE YTD values were correct on their latest FPS the company's PAYE liabilities are certainly not correct when viewed online. Please help.

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By Matrix
06th Feb 2017 16:05

Oh dear I had heard Xero payroll was rubbish and it shows the dangers of losing access to your records on the cloud. Won't Xero give your client access?

The FPS should replace all YTD figures I would call up PAYE helpline and see what months need EPS to remove specified charges and if penalties arise after filing then appeal on the grounds that Xero payroll is rubbish, client acted reasonably etc.

While on the phone ask them why their payments do not agree to the latest FPS if you think this is correct. Although the difference could be historic and relate to prior years, make sure you file an EPS for 15/16 with the CIS suffered.

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Replying to Matrix:
By chewmac
06th Feb 2017 16:39

Thanks M,
for your reply. Yes I do think Xero has some blame here but so does a client who tries to cut costs by doing own payroll.

I suppose what's mostly confusing me at the moment is:

With latest FPS being correct I can understand how the employee's (sole-director in this case) record of PAYE income will be correct at HMRC but...

Being that the employee's figures are based on an FPS's YTD figures - how can this possibly ever correct the employer company PAYE account entries?

Whilst I can submit £nil EPS for some months where no payment was made and clear some of HMRC's specified charges I cannot submit £nil EPS for months where payments have been made and yet seemingly I should not submit corrected FPS's for each month (because I can rely on YTD figures).

I realise that this is a horrible post to follow and i'd probably give up reading it myself! Sorry.

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By Matrix
06th Feb 2017 17:17

If it is a Director only payroll then the timing of his salary payments does not matter. Just file EPS (including CIS if applicable) and then put the YTD in the latest one as an FPS. Surely there should be no PAYE due if Director only payroll and CIS suffered?

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Replying to Matrix:
By chewmac
07th Feb 2017 08:20

Thanks again but client did own payroll and amounts paid were not what I would have advised. So, yes there are monthly liabilities.

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By Matrix
07th Feb 2017 08:36

If you are refiling anyway can you not change it to Director's cumulative and not pay any salary for the rest of the tax year? Or just put it all in month 12?

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Replying to Matrix:
By chewmac
07th Feb 2017 15:18

Thanks again for your reply. Basically he has made wage payments and submissions for m4-9 of 2016-17 tax year. The payslips are correct and I don't want to re-write history but it seems to have been the electronic submissions that are a mess. Not all paid dates have been correctly aligned with tax months in which they were paid.

I think making amended and therefore late submissions will be the way forward. I'm just not sure on chances of successful appeal of penalties.

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Replying to chewmac:
By petersaxton
07th Feb 2017 15:35

"I'm just not sure on chances of successful appeal of penalties."
You can only do what is right. The client has messed up so why shouldn't he have penalties?

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