RTI – The Earlier Year Update (EYU)

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We have covered four of the five RTI submissions in our Newsletters over the last few months:

1. The Employer Alignment Submission (EAS) – the once-only submission designed to align HMRC’s National Payment System (NPS) with the personal details held in your payroll system
2. The Full Payment Summary (FPS) – probably the main RTI submission made at, or before, the time the employee is paid, containing details of the employees, payments and deductions
3. The Employer Payment Summary (EPS) – the submission which allows the PAYE scheme to report any adjustment to the totals that have already been submitted via the FPS.  This will be essential where, for example, the FPS totals have to be adjusted by the value of any SMP that can be reclaimed in the tax month or quarter
4. The National Insurance Verification Request (NVR) – the submission which will enable an employer to trace or verify a National Insurance Number that has been used in the payroll

Last week, we interrupted the submission types with information about the processes that will be required to end the tax year under RTI.  Essentially, this involves completing the year-end Declaration and Questions on the final FPS or EPS of the year.  Finalising the year-end this way will remove the need for the P35, P38A and the P14s but not remove the obligation for the P60.

The final RTI submission is the Earlier Year Update (EYU).  The EYU is the submission used to correct errors made in a previous tax year.  Errors made in the current tax year are corrected in the payroll system and then reported via either an amending FPS or the next normal FPS.  The EYU is only used when an error on the FPS is noticed on, or after, 20 April in the following tax year – i.e. 20 April 2014 for the tax year ended 05 April 2014

The EYU shows only the amendments to be made to the relevant year-to-date figures for an employee.  These could relate to pay information, tax, NICs, Student Loan deductions etc.  For example, if the year-to-date tax for an employee was recorded incorrectly by £50 too little on the last FPS of the tax year, the EYU must show +£50 against this employee.  In this regard, the EYU should be regarded as the current P14 amendment facility that we have.  On receipt of the EYU, HMRC will amend their records accordingly and, as a result, amend the total employer’s tax and NICs liability for that tax year.

At the time of writing, we are awaiting further information and guidance about the EYU.  HMRC have confirmed that a schema for software developers will be released in 2012 at a date to be confirmed.  For this reason, some software providers may not provide this functionality as part of their product initially, as it will not be required until April 2013.  Some may chose not to provide it at all, relying on their clients to use the HMRC Website to submit the EYU.  HMRC will have to provide this functionality for small employers using Basic PAYE Tools, in the same way as they provide P14 amendment functionality

Further Information

• Payroll Help’s RTI Coverage
• Improving the Operation of Pay As You Earn (PAYE) – HMRC Impact Assessment
• Universal Credit – Welfare that Works
• Improving the Operation of Pay As You Earn (PAYE) – Collecting Real Time Information
• HMRC Press Statement 04 April 2011
• HMRC Statement 13 May 2011
• 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)

Tags: Basic PAYE tools, EAS, EYU, FPS, HMRC, NPS, NVR, P14, p60, RTI

This entry was posted on Tuesday, March 13th, 2012 at 11:12 and is filed under RTI. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.