Many employers believe payroll can only be changed in April each year. However, it is entirely possible to change payroll mid-tax year if necessary and it’s something payroll providers handle every day. When it’s done properly, there is no disruption to employees and no issue with HMRC.
This guide explains how changing payroll mid-tax year works, what needs to be checked, and what employers should think about before switching.
Can You Change Payroll Mid-Tax Year?
Yes. There is no rule from HM Revenue & Customs that says you must keep the same payroll provider for a full tax year.
Employee records do not reset when payroll moves. Year-to-date pay, tax, and National Insurance all continue as normal.
The key is making sure the correct information is transferred and set up properly in the new payroll system. This is why at Crystal we recommend you should operate a parallel run to check everything reconciles perfectly.
What Information Is Needed to Change Payroll Mid-Tax Year?
To change payroll mid-tax year, the new provider will usually need:
- Year-to-date pay figures
- Year-to-date tax and National Insurance
- Current tax codes
- Payroll frequency and pay dates
- Pension scheme details (if applicable)
- Employee details, name, address, DOB
- RTI number
- Pension Percentages for employee and employer or fixed values
- Details of any statutory payments
- Details of any attachment orders
- Payment and deduction types, such as overtime, salary sacrifice
- Details of any payrolled benefits
The way to think of this is if it goes through your payroll, you need information from the outgoing provider.
This information is normally taken from payroll reports produced by your existing system and for the new provider, should ideally be in excel format as PDFs give rise to errors and are far more time consuming for the new provider to setup.
If you are moving from a provider who uses Sage to a provider who uses Sage, just the last good backup should be sufficient to setup the payroll. In this scenario ask your outgoing provider to transfer the payslip portal to the new provider as only one provider can use the payslip portal.
RTI: What Must Be Set Up Correctly
When payroll is moved, one important technical step is often overlooked.
Each employee has an RTI identifier — a long reference number that is sent to HMRC with every FPS (Full Payment Submission), sometimes referred to as the payroll return.
This number helps HMRC identify the employee and link their pay and tax records correctly.
When you change payroll mid-tax year:
- The RTI number must be entered into the new payroll software
- This ensures HMRC continues the employee record correctly
- It prevents duplicate records or mismatches
A competent payroll provider will always check and carry this over as part of the handover.
Example: Changing Payroll Mid-Tax Year
Scenario
A company with 22 employees changes payroll provider in February.
- January payroll has already been completed
- Employees have existing tax codes and year-to-date figures
- Payroll is run monthly
What happens
- Year-to-date figures are imported into the new system
- RTI identifiers are checked and entered
- February payroll runs as normal
- HMRC receives the next FPS with no break in records
- Employees receive one correct P60 at the end of the tax year
From the employee’s point of view, nothing changes.
Payroll Records: What Employers Should Have Ready
When changing payroll mid-tax year, employers should make sure their payroll records are:
- Easy to read
- Clearly organised
- Available in a standard format
You should hold payroll records covering:
- The current tax year
- The previous 3 tax years
To be fully protected, we recommend keeping payroll records for 6 years, in case of an HMRC compliance check.
This includes payslips, FPS submissions, pension records, and payment summaries.
What About Employee Payslip Apps?
One practical point that is often missed is employee access.
If employees currently view payslips and documents through an app or portal, it’s important to know:
- When will the old app be switched off?
- Will employees still be able to access historic payslips?
- When should employees be told about the change?
This should be agreed in advance and clearly communicated, so employees don’t lose access unexpectedly or contact payroll in confusion.
Q&A: Changing Payroll Mid-Tax Year
Do we need to tell HMRC?
No. HMRC is updated automatically through RTI submissions.
Will our PAYE reference change?
No. Your PAYE scheme stays the same.
Is April easier than changing payroll mid-tax year?
Sometimes, but it is not required. Mid-year changes are routine.
Is changing payroll mid-tax year risky?
No. Poor handover is risky, not the timing.
The Key Thing to Know
If payroll is not working, waiting until April often just delays fixing the problem.
You can change payroll mid-tax year cleanly and compliantly — as long as the transfer is handled properly, records are complete, and employees are kept informed.
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