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Separate payrolls on 1 PAYE ref

Can an employer run separate payrolls, with separate payroll providers, on the same PAYE ref?

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A relatively new client has asked us to assist with their payroll.  They are a recruitment agency and place employees with customers on a temporary basis.  They have approx. 40 employees with 4 customers.  Currently payroll is run by 3rd party connected to a factoring company as part of a factoring agreement.  One customer is to be removed from the factoring arrangement (our client has indicated that they have taken legal advice and are able to do this) and our client wants us to run the payroll for the 10 employees at this customer.

  1. Can an employer run multiple payrolls on one PAYE ref?  (I'm pretty sure they can as some employers have weekly and monthly paid employees.  I think an employer can submit multiple FPSs)
  2. Can these be run by different payroll providers?  Who may be using different software?     
  3. Will there be confusion with HMRC where the employees are on the payroll then transfer to our "new" payroll?

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By neiltonks
11th Sep 2019 20:04

1. Yes. Many employers have multiple payrolls on one reference.

2. Yes. HMRC don't care who runs the payrolls, or what software they use. That's up to the employers to decide.

3. The issue here is that changing providers almost inevitably causes a change in the "payroll ID" values by which HMRC know each employee. However this won't cause an issue provided that a) the last FPS from the old system is sent before the first FPS from the new one, and b) the first FPS from the new system has the "payroll ID changed" flag set and preferably also quotes the 'old' system's payroll IDs in the field provided for that purpose. How you achieve this will depend on the software being used, so ask the provider as it's important to get this right unless you enjoy sorting out 'disputed charges' scenarios!

The other issue which you'll have to work out is who sends the EPS, assuming one is required. This needs to be sent ONCE per period, containing consolidated values from the two payrolls, so you need some co-ordination between yourself and whoever runs the other payroll to sort this out. If more than one EPS is sent for the same period, each overwrites the values submitted on its predecessor so you can't send one from each payroll system as HMRC will end up only having the values from whichever is sent last!

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