RTI – The Full Payment Submission (FPS) Part 2

Friday, February 3rd, 2012

Last week, in Part 1, we started to look at the role of the FPS in the RTI cycle.  We advised that the FPS may be used for the purposes of Payroll Alignment when there is no requirement for the employer to submit an EAS.  If used this way, the first FPS must show every employee that has been paid since the start of the tax year, regardless of whether they have been paid in the current period.  Therefore, this will include leaver information.  For employers who have an obligation to complete the EAS, i.e. 250 employees or more and / or a ‘split’ scheme, the first FPS will also advise HMRC of any changes that have happened since the EAS – address, name etc

The FPS is the main RTI online submission, normally only consisting of the payments and deductions made for payees in that payroll group paid in that pay period.  The requirement under RTI is to advise HMRC details of the employees, payments and deductions at the time of, or before, the net payment is made to the employee.  If the pay frequency is weekly, there is a requirement to advise HMRC this information on a weekly basis, if a bi-weekly pay frequency, the requirement is also bi-weekly etc.  HMRC will use the data totals from FPS submissions to update employees’ National Insurance, Student Loan and PAYE records.  Plus, the information on the FPS tells HMRC the monthly / quarterly tax and NICs liability that it can expect to receive as a remittance.

HMRC are in the process of issuing guidance on what to do in the situation of the FPS being incorrect as a result of an error on an employee’s record – e.g. the employee is underpaid a bonus and a manual payment is made outside of the payroll.  The assumption is that this can be corrected in one of two ways:

  • Amend the following payroll, at which time the additional pay, tax, NICs etc will be reported on the FPS relating to that payroll, or
  • Submit an additional FPS which shows the adjusting figures ONLY, i.e. a similar process to amending a P14 where it is only the differences that are shown.  The original FPS plus the adjusting FPS will add together at HMRC and in the payroll system to the correct figures.  Note that the draft guidance says that the employer must overwrite the incorrect figure with the correct year-to-date value, however, the individual field must be updated with a +/- value

We are waiting for guidance as to what action should be taken in the circumstance that an incorrect start or leaver date is transmitted and has to be corrected in a following submission.

HMRC originally wanted the RTI submission to be part of the BACS submission that is made each time a payment is made.  After opposition, this decision was reversed, however, does remain their long term ‘strategic’ goal, as this compliments the concept of the RTI submission being made at, or before, the payment is made to the individual.  Therefore, an interim solution has been required, resulting in a field called the ‘BACS Hash Code’.  When BACS-approved payroll software sends a payment instruction to BACS, it generates a reference number.  This number, transmitted to BACS, will appear on the FPS file. Vocalink, the company that physically processes the BACS payments will, in turn, send this reference number to HMRC via EDI of the Gateway.  HMRC will, therefore, be able to match the information from the two sources

A list of the data items required for the FPS is provided at the end of this section of the course material.  This contains information of the data that will form part of the regular submission to HMRC in real time, NOT the final transmission of the tax year.  The final transmission will contain additional information and fields – this will be covered when we talk about end of year processing and RTI.

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
18a Related Tax Year Tax year to which the submission relates Y
Field Number Employer Information Comment Mandatory?
5 National Insurance Number (NINO) Must be shown on all RTI submissions if known and verified on an official document 
5A Title
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
8 Initials See above
9 Second forename
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
12 Passport Number Only if stored on payroll record as part of recruitment process
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
17 UK Postcode
18 Foreign Country Make an entry here if your employee’s address is outside the UK, Channel Islands and Isle of Man.
Note that where an employee has two or more records within the same scheme, fields 24 – 86Ba may be completed more than once
Field Number Payroll ID Comment Mandatory?
38 Payroll ID in this employment If there is a unique identifier (payroll number or works number) for the employee and it is required on HMRC output, enter it here exactly in the format it is to appear.  Important – if the employee is on the payroll twice, i.e. two separate contracts of employment, the payroll ID must be unique in each case.  HMRC guidance is that a payroll ID is not reused – if an employee is re-employed it should be under a separate ID number.This field should only be completed if the employer requires separate tax codes to be applied to separate records.  If not, this should be left blank
39 Indicator that Payroll ID for this employment, if present on last submission, has changed this pay period Indicate ‘Yes’ if the payroll ID has changed between this and the last FPS submission
40 Old Payroll ID for this employment Only completed if the Payroll ID has changed
Field Number Employment Information Comment Mandatory?
24 Starting Date P45 / P46 procedure no longer applies and new starter information is submitted via RTI – make a date entry when reporting that the first payment is being made to the starting employee. This is no separate process of advising new starters to HMRC
24A Starting declaration If a ‘Starting Date’ has been entered above, this starting declaration must be completed:

  1. this is their first job since the start of the tax year
  2. this is currently their only job
  3. they have another job or pension

Enter A, B or C, corresponding with the employee’s declaration. If the employee does not provide this information, complete declaration ‘C’ and use 0T code on a week 1/month 1 basis.

For new occupational pensioners indicate ‘B’, unless the individual is continuing to work, in which case, indicate ‘C’, and enter the annual amount.

For employees seconded to work in the UK indicate ‘B’ and complete one of the indicators below.
27 Indicator of Student Loan deduction needed Enter ‘Y’ if applicable
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.
Field Number Employee Seconded to work in the UK Comment Mandatory?
28 Indicator if intention to live in UK for 6 months or more ‘Yes’ if the employee has been seconded to work in the UK and intends to live in the UK for more than six months
29 Indicator if intention to live in UK for less than 6 months ‘Yes’ if the employee has been seconded to work in the UK and intends to live in the UK for less than six months
30 Indicator if individual will be working both in / out of the UK but living abroad ‘Yes’ if the employee has been seconded to work in the UK and will be working for both inside and outside the UK, but will be living abroad
31 Indicator EEA ‘Yes’ if the employee is from a country in the EEA
31A Indicator this is an EPM6(Modified) Scheme If this submission relates to an EPM6(Modified) Scheme for tax equalised expatriate employees indicate ‘Y’ for Yes
Field Number Occupational Pension Comment Mandatory?
33 Indicator an Occupational pension is paid because they are a recently bereaved Spouse/civil partner If entry needed indicate ‘Y’ for Yes
34 Annual amount of occupational pension In the format £0.00 Y if 33 completed
Field Number Leaver Information Comment Mandatory?
41 Date employment contract ended Enter the date the employee stopped working – not more than 30 days in advance
51 Indicator that the payment is a payment after date of notification of contract ending Indicate ‘Y’ for Yes when a payment is being made after a FPS has been made with a leaving date and the employee has not been re-employed.
Field Number Payroll Information Comment Mandatory?
41A Taxable pay to date in this employment including taxable payrolled benefits in kind Only figures from this employment
41B Total tax to date in this employment

Further Information

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