RTI – The Employer Alignment Submission (EAS)Saturday, January 21st, 2012
We are now looking at the data that will be contained in the RTI submissions to HMRC. As a reminder, there are five types of submissions that RTI Employers can be required to make. If the payroll is outsourced, say to a payroll bureau, they may make these on the employer’s behalf. Note that not all of the submissions may be necessary for all employers:
- Employer Alignment Submission (EAS)
- Full Payment Submission (FPS)
- Employer Payment Summary (EPS)
- National Insurance Verification Request (NVR)
- Earlier Year Update (EYU)
Following last week’s complete list of the data that HMRC have requested on the various submissions, we focus this week only on the data required in the Employer Alignment Submission (EAS).
An employer will receive an ‘invitation’ from HMRC to join the RTI scheme for each PAYE scheme they process. For each separate scheme, the invitation will contain an ‘on-boarding date’. This is the date after which HMRC expects the PAYE scheme to be submitting data via RTI.
Once the employer has received this invitation, it is essential that employers perform a process of ‘Payroll Alignment’ as the first step of moving to RTI. This is, simply, so that the records on the payroll system can be aligned with the records held at HMRC under that tax reference. One way of achieving this is via the EAS. The other way of achieving this is via the Full Payment Submission, which will be covered next week.
An EAS is a mandatory requirement for:
- large PAYE schemes, where the number of employees is 250 or more and / or
- the PAYE scheme is a ‘split’ scheme – for example, where part of the PAYE tax reference is processed on one payroll system, and part on another payroll system. The same situation will apply when, for example, part of the payroll under one tax reference is processed in-house and the other is outsourced
It is not required for employers with fewer than 250 employees; however, it can be made voluntarily. Employers are advised to check with their payroll software providers / suppliers regarding the solution they will offer in this respect. Some providers of software may expect customers to perform the EAS, regardless of size.
The EAS is designed to be a once-only submission, enabling alignment to take place before the employer submits any other information. Therefore, it is essential the information contained in the EAS is correct and complete. The EAS will contain details of all employees / pensioners on the payroll since the start of the current tax year, including employees who have not been paid, such as casuals, those on unpaid maternity leave etc.
Note that HMRC are unable to accept multiple EAS for a ‘split’ PAYE reference until April 2013. At this time, HMRC advise that they will only accept a split EAS where ‘it is impracticable’ to consolidate a PAYE scheme into one submission, for example parts of the same payroll are processed in different locations by different providers. It is envisaged that a split-EAS will operate in the same way as a split P14 return, with HMRC consolidating the parts once the final part has been submitted. Again, where this is a consideration, employers are advised to contact their payroll software providers.
A list of the data items required for the EAS is provided below:
|Field number||Employer Information||Comment||Mandatory?|
|1||HMRC Office Number||For example, if the Employer’s PAYE reference is 901/A111, the HMRC Office Number is 901||Y|
|2||Employer PAYE Reference||For example, if the Employer’s PAYE reference is 901/A111, the Reference is A111||Y|
|3||Employer Accounts Office Reference||The reference is in the format 910RR00012345||Y|
|Field number||Employee Information||Comment||Mandatory?|
|5||National Insurance Number (NINO)||Must be shown on all RTI submissions if known and verified on an official document|
|6||Surname or Family name||Must be shown on all RTI submissions if known and verified on an official document||Y|
|7||Forename or given name||Must be shown on all RTI submissions if known and verified on an official document||Y if known otherwise insert initial in forename field|
|9||Second forename or given name||Y|
|10||Date of Birth||Actual not default date of birth. Must be shown on all RTI submissions if known and verified on an official document||Y|
|11||Current Gender||Must be shown on all RTI submissions if known and verified on an official document||Y|
|13||Address line 1||Mandatory if NINO unknown and for new starters||Y|
|14||Address line 2||Mandatory if NINO unknown and for new starters||Y|
|15||Address line 3|
|16||Address line 4|
|18||Foreign Country Indicator||If the address is outside the UK, Channel Islands and Isle of Man|
|24||Starting Date||Must be current date + 30 days or earlier than current date.|
|38||Payroll ID in this employment||Note that an EAS will overwrite any details that are currently held at HMRC with regard to a payroll number that is held against the employee’s record|
|40A||Irregular Employment Payment Pattern Indicator||A ‘Yes’ Indicator denoting that the employee is paid on an irregular basis, e.g. casual or seasonal employees / employees on maternity or sick leave / employee paid, say, quarterly, bi-annually etc. This indicator is important as HMRC will check if employees have not been paid for a specific period of time (12-14 weeks) and will flag them as leavers in their system. This irregular employee marker will prevent a leave date being processed by HMRC on the NPS.|
|41||Date employment contract ended|
|56||Tax Code Basis||Y|
HMRC advise that the EAS submission will be checked for data quality, which may result in them contacting the employer to discuss the submission and, possibly, request it to be resent. In an update to RTI software developers on 19 January 2012, HMRC advised that if the EAS contains a National Insurance Number (NINO) that cannot be matched to their database, an ‘unsolicited’ NINO notification will be sent back to the employer making the submission. This will be via a ‘NVREP’ message, which will apply to other RTI submissions as well, which developers must ensure their payroll systems are capable of receiving this.
One Payroll Alignment has taken place, by either the EAS or FPS, the employer will be considered to have joined RTI for that PAYE scheme. The relevant RTI submissions must be made to HMRC and the process of sending the P45 and P46 information will cease – the RTI submissions will contain all the P45 and P46 information and are, therefore, not necessary.
HMRC have produced guidance on the subject of Payroll Alignment and we provide the link below.
- Payroll Help’s RTI Coverage
- HMRC - Improving the Operation of Pay As You Earn (PAYE) – HMRC Impact Assessment
- DWP - Universal Credit – Welfare that Works
- HMRC - Improving the Operation of Pay As You Earn (PAYE) – Collecting Real Time Information
- HMRC - HMRC Press Statement (04 April 2011)
- HMRC - HMRC Statement (13 May 2011)
- HMRC - Summary of Responses (30 September 2011)
- HMRC - Draft RTI Regulations (PAYE)
- HMRC - Draft RTI Regulations (NICs)
- HMRC - Draft RTI Regulations (CIS)
- HMRC - Draft PAYE Direction (Technical Note)
- NDS - HMRC Press Statement (23 November 2011)
- HMRC - Employer Bulletin 39
- NDS - HMRC Press Statement (12 December 2011)
- HMRC - Improving Your Payroll Data
- HMRC - Starters and Leavers Scenarios December 2011 (removed by HMRC 2012)
- HMRC - Technical Note ‘Proposal to Abolish the P45/P46 Forms’
- HMRC – Initial Guidance on RTI Items May 2011
- HMRC – Payroll Alignment January 2012
- HMRC – PAYE Update 10 – NINO Verification Response (NVREP)