RTI - Submission after errors

[GrantSaunders]

Hi

Having read the following from the news letter this week I am slightly confused/concerned!:

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 Note that the draft guidance says that the employer must overwrite the incorrect figure with the correct year-to-date value, however, the individual field must be updated with a +/- value

In most cases where an error has occured we need to run something called a 'roll-back' (we use Sage). This means that we select the one employee affected, roll back their record to the last period and re-enter the correct data and update. I am confused as to how we would submit a +/- value if the incorrect data has been cleared off and only the correct data exists. The system (currently) does not have the capabilites to process two payments in one pay period so I can not see any other option other than to submit the new complete data. This would of course mean it's a + submission but how would the existing one be minused off?

Does anyone have any views on this? It's probably a question for the software provider but thought I would check here first.

Thanks in Advance.

Grant Saunders MCIPPdip
Payroll Manager
PayeStaff

[GrantSaunders]

Can I just add that whilst HMRC's first option of adjusting the following pay period will sometimes be acceptable this of course can quite often not be feasible for a number of reasons.

[Neiltonks]

The option of sending an additional FPS showing corrected year-to-date values and +/- adjustments in the this-period figures will (for the pilot phase at least) only be available when the adjustments are positive. This is because many of the this-period fields in the FPS will not currently accept negative values, though HMRC say this may change in future.

Neil.

[IanHolloway]

Hi Grant,

The issue of making adjustments after the payroll has been run is quite a common one, as is one way of dealing with them which is via 'roll-backs'.

You are correct in that it is your payroll software provider which will have to be contacted and asked exactly how their product will deal with this situation. From what you say in your example, it seems that an initial FPS would be created at the time the original payment is made to the employee. At the time that the adjustment is made (via a 'roll-back'), your system must be capable of recognising the + / - adjustment and reporting this on an additional FPS.

Neil is correct in that negative adjustments will not be allowed in 2012/13 (for pilot employers). However, HMRC have recently advised that they now recogise that this validation is required in their systems, however, it will only allow it from April 2013 onwards. 2012/13 negative adjustments will be via a series of 'work-arounds'.

Please do let the Forum know how your payroll software will handle the situation when you find out.

Kind regards,


Ian