We have a small business client with half a dozen or so on the payroll. Their earnings are very low as it is a small shop and the directors work there practically every day to keep staffing requirements to a minimum.
During 2013-14 one of the directors has been on maternity leave and claiming SMP. The SMP (with compensation) has meant that until recently, the monthly deductions due to HMRC were negative. We ran the payroll as required and submitted the FPS and EPS to show that no payment was due for the month.
Maternity has now ended and deductions have returned to their previous level however a credit has built up on the clients account that will cover all their deductions this tax year (and a good few months more). Now that we are running the standard payroll, the FPS is indicating payments are due to HMRC but surely this is not the case due to the previous months? Should we be filing an EPS on the grounds that the client will not be paying the figure shown on the FPS? If so, how?
Our software provider indicated we should simply "cover" the deductions due by putting the relevant figure in an EPS submission under "SMP rec". I'm worried this will duplicate the SMP on HMRC's records.
Can anyone direct me at how this should be dealt with?