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Moneysoft Payroll FPS/EPS issues

No options to file EPS for Period of Inactivity.

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Hello all,

I have been using Moneysoft payroll software for many years without any issues.

Recently, HMRC came back asking one of my clients, requiring that the payroll for 5 months of previous tax year 2020/21 be resubmitted correctly because the months where he was not being paid should be put down as a "period of inactivity" through EPS rather than £0 FPS.

After trying to figure out the issue through online support notes, I called Moneysoft on the 084 number. The support agent mentioned that this is not a requirement, and there is no option in the software for EPS, and only £0 FPS can be submitted. However, HMRC's website is quite clear on this (https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc#e...). 

Just wondering if anyone else come across similar issues?

Thanks

EPS

Replies (25)

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By SXGuy
23rd Jul 2021 15:27

Have you checked the submission section under pay tab? If you do you will see the periods where there was no pay should give you the option to submit still.

In fact moneysoft are usually quite good at reminding you there's unsubmitted periods so unsure why it's not letting you.

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Replying to SXGuy:
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By Hugo Fair
23rd Jul 2021 15:48

I've never used Moneysoft but:
* You appear to be describing using it to submit a return (presumably an FPS) for periods where there was no pay; whereas
* HMRC (per OP's copied image from guidance) are saying that's not acceptable - an EPS (with relevant data items to indicate no pay in period) is needed.

Are we saying that Moneysoft cannot create/submit an EPS (unlikely given the need for reporting other things like statutory pay)? Or does it support an EPS, but help is needed on how to get it to comply with HMRC's guidance?

Hopefully a Moneysoft user can help (as this isn't an unusual scenario)!

Thanks (1)
Replying to Hugo Fair:
Tajinder Dhuria Accountant, Tax Adviser, Finance Adviser, Business Adviser
By tdhuria
23rd Jul 2021 15:54

Hi Hugo,

Yup Moneysoft doesn't have the EPS in place for this. See their reply below suggesting nil FPS contrary to HMRC's guidelines.

If you have an employee/director active on the payroll that isn't being paid anything, this will just be reported as a Nil FPS submission. There is no option to report a period of inactivity on an EPS submission, it's not a requirement for payroll softwares to report that. Reporting a Nil FPS submission is all that is required.

Kind regards

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Replying to tdhuria:
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By Hugo Fair
23rd Jul 2021 15:59

Frankly appalling.
Irrespective of whether they're right or wrong on this specific topic (and my opinion on that is clear), a reputable Payroll software developer should not pick and choose with which parts of the HMRC specification to bother complying!
It makes you (or at least me) wonder what else they have omitted from PAYE/RTI?

Thanks (2)
Replying to Hugo Fair:
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By Wanderer
23rd Jul 2021 17:12

To be fair, that is based on what HMRC say on gov.uk. And, as we all know, .gov.uk is not the law and is also occasionally just wrong. I'd actually prefer to read exactly what the specification says before I condemn MoneySoft.
Also, elsewhere on .gov.uk it advises to do whet the OP has been criticised for:-
https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye63025#:~:text=I...,'irregular'%20or%20infrequent%20basis.
MoneySoft does send an irregular pay indicator with each FPS for anyone on the payroll who hasn't been paid.

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Replying to Wanderer:
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By Hugo Fair
23rd Jul 2021 18:25

To take your points in reverse order ...

1. The use of the "irregular pay indicator" data item is only relevant in the context of one or more (but not all) of the employees who are "on the payroll currently" (i.e. are noted at HMRC's end as having ongoing employment) and who, although included, have no pay that period within the FPS.
The purpose is to ensure that one of HMRC's blasted rules (the one that otherwise interprets 3 consecutive nil pay FPSs as meaning the employment record of that employee should automatically be terminated by HMRC) is held in abeyance.
But to be effective, the FPS must contain at least one record for a person who did receive pay that period.

2. There is not one single document that constitutes a 'specification' for RTI (despite requesting it since the pre-beta development days)!
However the nearest (and not too technical) document - the Guidance on RTI Data Items for Software Developers - says this in the Comments column for data item 87Ba ('No payment due as no employees paid in this pay period'):
"If no payments are made within a tax month, so there is no FPS return to make, then you should submit an EPS with this field checked to indicate no return or payment is due for this tax month. If 87Ba is completed you must also complete 137 & 137a."
This comes immediately after the introduction to the EPS section, which says (in bold):
"Employer Payment Summary (EPS) - If no payments to employees are made within a pay period, or you want to recover statutory payments, CIS deductions suffered send an EPS."

All fairly unequivocal I'd say ... and certainly followed by all the Payroll software packages that I know.

Thanks (1)
Replying to Hugo Fair:
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By Wanderer
23rd Jul 2021 19:42

1. Yes we know all that. Also surely if you don't file the FPS but only the EPS then said employees records would be terminated after 3 no shows?

2. Okay, but the guidance for software developers is obviously not the law and you have confirmed there is no proper specification.
Is there anything in the law that actually mentions FPSs or EPSs and / or their requirements? Only bits I can remember were the referrals to 'Real time returns' which must be FPSs. Indeed whilst there are penalties for late / unfiled FPSs I don't think there are for EPSs.

I have many cases of exactly the position the OP describes and haven't incurred the wrath of HMRC in the way they have. And quite frankly HMRC should direct their precious time towards much more important issues. Personally if there are no consequences of not filing EPSs I'd be inclined to consider ignoring it & wait for HMRC to get bored in taking this forward.
First time I've heard of it being an issue and if it really is I think it would have been publicised more widely and MoneySoft would come up with a way of placating HMRC.

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Replying to Wanderer:
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By Hugo Fair
23rd Jul 2021 20:49

FWIW I didn't say "there is no proper specification", just that there's no one single document.
But the suite of documentation for developers is comprehensive (and amongst the best written and maintained of anything produced by HMRC) ... and is used by all the software developers I know (in both massive and small companies).

And I'm not sure of the basis for you saying "if there are no consequences of not filing EPSs"?
Whilst I know several 'leading lights' in the developer world would argue that the EPS should never have come into existence (by incorporating most of its data items within the FPS), as it stands it has a very specific purpose from HMRC's perspective.
An FPS is per pay run (weekly/monthly, regular/irregular, etc) - and there can be multiple payrolls within a single PAYE scheme generating each FPS - and its purpose is to provide on/before info regarding payments to employees.
An EPS is per tax month - and there can only be one per PAYE scheme each month - and its purpose is to provide info regarding all non-individual YTD payments due to HMRC so that they can reconcile the 'account'.

The consequences of failing to file an EPS that is due (whether to maintain/update YTD figures or to explain the reason for 'missing' FPSs etc) are likely to be wrong calculation by HMRC of what is owed by that PAYE scheme ... and we all know how good they are at 'correcting' such figures, even when the problem is identified!

So, to revert to OP's question (and to your acceptance of the situation), I'd ask ... why does Moneysoft feel it is right to be "the only one marching in step" - and whether you're happy to risk HMRC [***]-up clients' PAYE reconciliations (which they will treat as 'employer error' due to missing/incorrect EPS filings).

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Replying to Hugo Fair:
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By Hugo Fair
23rd Jul 2021 20:52

Oh for goodness sake ... since when was the phrase s c r e w - u p a 'bad' word?

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By CWservices6064
23rd Jul 2021 17:11

Moneysoft guidance says:

Employer Payment Summary (EPS)

If during any one PAYE month an employer has statutory payments to recover (e.g. for Maternity pay etc.) then this information is reported to HMRC via the Employer Payment Summary (EPS), which is sent as necessary on a monthly basis.

An EPS is also required if there are no FPS returns in a particular month because the employer has no active employees entered in the system. If there are employees entered but they are not being paid then Payroll Manager sends an FPS return to indicate this rather than an EPS.

Moneysoft Payroll Manager is able to automatically determine whether or not an EPS is due, and prompts you to send it at the relevant time.

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Replying to CWservices6064:
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By CWservices6064
23rd Jul 2021 17:21

In product help says:

Employer Payment Summary (EPS)

The EPS used to inform HMRC of any statutory payments recovered in any month (e.g. for sick, maternity or paternity pay), or CIS deductions suffered by the company.

This is sent on a monthly basis when appropriate.

An EPS also becomes due if the employer has not sent an FPS in a tax month because they have no employees.

......So Moneysoft only produces an EPS when there are no employees on the system rather than when all employees are processed at nil pay for a period.

Moneysoft is on the HMRC list of 'tested and recognised' paid for software so I would hope that their filings are deemed acceptable although HMRC guidance seems clear.

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Replying to CWservices6064:
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By CWservices6064
23rd Jul 2021 17:21

In product help says:

Employer Payment Summary (EPS)

The EPS used to inform HMRC of any statutory payments recovered in any month (e.g. for sick, maternity or paternity pay), or CIS deductions suffered by the company.

This is sent on a monthly basis when appropriate.

An EPS also becomes due if the employer has not sent an FPS in a tax month because they have no employees.

......So Moneysoft only produces an EPS when there are no employees on the system rather than when all employees are processed at nil pay for a period.

Moneysoft is on the HMRC list of 'tested and recognised' paid for software so I would hope that their filings are deemed acceptable although HMRC guidance seems clear.

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Replying to CWservices6064:
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By Hugo Fair
23rd Jul 2021 18:05

I'm not here to attack or defend Moneysoft (which as I've said I've never seen or used), but ...

* "If there are employees entered but they are not being paid then Payroll Manager sends an FPS return to indicate this rather than an EPS" ... may well be a factually correct description of what the software does - just not what it *should* do according to HMRC.

* "An EPS also becomes due if the employer has not sent an FPS in a tax month because they have no employees" ... is an elision of a truth (up to the word 'because') and a falsehood (thereafter). [An 'empty' FPS is not recognised by HMRC's software - and an EPS is needed to explain any missing FPSs (with different data items for different reasons)].

* "Moneysoft is on the HMRC list of 'tested and recognised' paid for software so I would hope that their filings are deemed acceptable" ... total non sequitur I'm afraid.
Even in the days of 'accreditation' (when HMRC carried out independent tests) the badge was misleading because the tests were so limited - basically a few Tax/NIC calcs.
Whereas now the 'recognition' on offer is not based on any HMRC testing (just self-certification by the developer) - and has nothing to do with scenarios that would determine the need for filing of FPS and/or EPS.
[In the early days, and we were in the very first cadre back in 2004, it took a couple of weeks of effort to apply - now it takes us less than 1/2 hour, including the coffee break!]

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By rmillaree
24th Jul 2021 08:08

I think I would send hmrc correspondence to moneysoft and tell them hmrc are quibbling over this exact issue and that it needs sorting. If they have official confirmation what they are doing is hmrc approved if they can provide confirmation to be passed onto that hmrc officer. If there is doubt as to whether hmrc have changed their policy if they can have discussion as appropriate with relevant hmrc section and advise how they would advise you proceed. Moneysoft are anything but a bunch of muppets and I would expect them to take the time and effort to deal with anything that they know would potentially have ongoing implications With hmrc or where hmrc are directly contradicting what they say. You should Include details of relevant hmrc advise that seems to contradict what they do.

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RLI
By lionofludesch
24th Jul 2021 13:16

"The support agent mentioned that this is not a requirement, and there is no option in the software for EPS, and only £0 FPS can be submitted. "

What you've been told there is utter, utter rubbish.

I had a client employer in the same boat last tax year and his submissions went through as EPSs. No intervention from me - the software chose EPS over FPS.

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Replying to lionofludesch:
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By rmillaree
25th Jul 2021 12:28

I must say we have processed hundreds - possibly thousands of similar transactions without ever hearing a peep from hmrc. Ok these could all be technically wrong if moneysoft have messed up but my suspicion here is that moneysofts chosen route has at a minimum been santioned by hmrc as being acceptable by hmrc at some point in the past - i would say its up to moneysoft to prove that though if hmrc are b itching otherwise. You can probably guess based on experience i have found moneysoft to be much more reliable than hmrc when it comes to one party saying the other is wrong either way!!

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Replying to rmillaree:
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By Hugo Fair
25th Jul 2021 15:27

FWIW - my guess:
* HMRC 'position' is the correct one
* Moneysoft had (note tense) 'temporary permission' for their interpretation
* Moneysoft have not changed software to comply with HMRC 'position'
* HMRC never changed their 'position' (or their software or staff guidance)
*Net result = current disconnect

HMRC have a lot of history (despite their harsh reputation) of being lenient with those developers deemed 'too large to allow to fail' (an onion-flavoured stuffing being a recipient of such generosity quite a lot in the past).
But they don't change their rules/specs (or therefore their own systems), merely allow the culprit to set about rectifying the error without penalty or publicity.
If the developer treats this leniency as a 'dispensation' then the impacts will of course be felt later on.

But all this, whilst logical, is just my guess regarding this specific scenario.

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RLI
By lionofludesch
25th Jul 2021 13:29

If you look at the RTI report on Moneysoft it tells you whether a report has been submitted as an EPS or an FPS.

What does it say?

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Replying to lionofludesch:
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By rmillaree
25th Jul 2021 13:43

I can confirm what tdhuria says is the same as what we have being doing in that moneysoft reports FPS submisions and not EPS submisisons when all staff are paid "nil" for the period.

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Replying to rmillaree:
RLI
By lionofludesch
25th Jul 2021 16:01

rmillaree wrote:

I can confirm what tdhuria says is the same as what we have being doing in that moneysoft reports FPS submisions and not EPS submisisons when all staff are paid "nil" for the period.

Ah right - you have staff, they're just not getting paid.

Well, I think that's correct.

My fella just didn't have any staff in the period under discussion.

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By rmillaree
25th Jul 2021 13:50

Could there be a subtle difference here between pay being nil rather than employee not being paid anything?

I may be mixing nils and nothings here - must admit i dont really do any day to day payroll processing nowadays !!

Note here is link to hmrc forums where it is confirmed that for nil payments fps should be submitted.

https://community.hmrc.gov.uk/forums/customerforums/payepe/71ed0485-ff40...

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Replying to rmillaree:
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By Hugo Fair
25th Jul 2021 15:14

No argument with that HMRC forum response (and I don't always say that) ... but it it's not a comparable situation to the rest of this thread.

The forum is referring to where AN employee receives nil pay in the pay period being processed (which may be weekly or ..) but other employees are paid ... and in such a situation (where FPS is obviously required anyway) the recommendation is that the nil-paid employee is included.
Whereas OP is referring to where ALL employees receive nil pay in a pay month (possibly consisting of multiple pay periods) ... and in such a situation an EPS is required (defining the period of no payroll processing) rather than a series of FPS files.

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Replying to Hugo Fair:
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By psimonparsons
30th Jul 2021 00:07

HMRC instruction is that anyone with no pay or change are not included on the FPS. Nil EPS is where there are no employees being reported in a tax month regardless for the whole scheme

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David Ross
By davidross
29th Jul 2021 10:49

As a happy Moneysoft user for some years, I bow to the technical knowledge being shown here - for instance I had no idea that if an employee was not paid for three months, HMRC would think that they had left! That has never seemed to happen when we file Nil for 11 months and then put in annual directors' pay for Month 12.

Could tdhuria confirm that he filed all the reports that Moneysoft suggested? We just load all the clients into its RTI batch processor and file whatever is requested. No problem.

We checked one of our employer clients which has Nil pay and the only EPS is at the beginning of the Tax Year, otherwise it is FPS every month. This sounds like tdhuria's experience.

Another, where there are no employees, gets an EPS every month.

A final word on Moneysoft. They have coped with everything that has been thrown at them in recent years without missing a beat. The interface looks a bit tired and we have to buy Parallels and use Windows to run on our Macs, but stick with Moneysoft because of the high level of trust. It seems unlikely that they would be in any way 'lazy' in their dealings with HMRC.

Who would bet that some low level HMRC employee knows more than Moneysoft about this issue?

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By psimonparsons
30th Jul 2021 00:18

Use the HMRC Basic PAYE tools (BPT) to submit the nil EPS. It is only required if no one is paid in a tax month and there is no FPS to submit.

There is no such thing as a blank FPS.

The Nil EPS is a nonsense bad technical design workaround (as is the whole EPS which was an after thought bodge).

Why would HMRC require nil EPS for employees who are declared as quarterly or othet multi-month pay frequencies. It’s a nonsense process.

The BPT is totally compatible with payroll use in the added nonsense process.

https://www.gov.uk/government/publications/basic-paye-tools-employer-pay...

As a by the way, it is not a requirement for HMRC recognised PAYE software to submit EPS. The testing relates to FPS only and can work alongside the BPT EPS which has no employer size limit.

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