HMRC has amended its correcting pay or deductions guidance to make it easier to understand how to complete an Earlier Year Update (EYU) that includes a negative amount of employee National Insurance.
The new guidance explains that, if the difference is negative (because you deducted or reported too much National Insurance), you also need to set the ‘NIC refund indicator’ to:
‘Yes’ if you’ve refunded your employee or no refund was due ‘No’ if you still owe your employee a refund (for example because they’ve left your employment).