23-04-2021

In line with our earlier updates on these newsletters, as part of the update, HMRC has delivered more information and guidance on the requirements of the previous year changes.

As we confirmed, the Earlier Year Update (EYU) is no longer a valid submission type to make amendments to the tax year ending 5 April 2021. As such, HMRC is clarifying detail on future submissions using a further Full Payment Submission (FPS) to correct earlier years’ payroll data.

Firstly, when making the submission you must use Late Reporting Reason H, and this should be used on all FPS submissions which correct earlier payroll data. This brings the process in line with submissions received on or before 19 April.

As the FPS will be an adjustment to the pay in that tax year the payment date should be equal to, or later than, the last payment date reported in that year to ensure our records are updated.

For example:

a) An individual is in employment all year and the final FPS for the year is submitted on 30 March 2019, with a payment date of 30 March 2019.

b) It is then identified in June 2019 that an error occurred in their Month 11 FPS. The FPS should include the final payment date of 30 March 2019 (as the latest pay date in that tax year) and amended monetary values.

From April 2021 if you need to correct an employee or employees National Insurance contributions for 2020 to 2021 and future years which involves a negative amount, but you are unable to refund your employee/employees (for example because they’ve left your employment) you should submit the FPS and then write to HMRC to adjust your charge and refund your employees.

When writing to HMRC, you will need to confirm:

  • the subject: Overpaid Employee National Insurance Contributions
  • your Employer name, address, and PAYE reference number
  • the name, date of birth and National Insurance number of the employee/employees concerned
  • the tax year of the overpayment
  • how much National Insurance was overpaid/needs refunding
  • why the overpayment occurred
  • why you are unable to make the refund

If you need to correct one employee’s National Insurance contributions, please write to HMRC at:

HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1AN

If you need to correct more than one employee’s National Insurance contributions, please write to HMRC at:

HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1BX

HMRC will contact you when the refund and adjustment have been made and the adjustment will also be reflected on your Business Tax Account.


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