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Reconciling PAYE charges for Year End

1 April 2014 by Crystal HR & Payroll Ltd

There may be occasions when employers can’t reconcile a charge shown on HM Revenue & Customs (HMRC) records to theirs.

Here are a few steps employers can take to eliminate some of the most common errors and resolve the issue without having to contact HMRC.

Business Tax Dashboard

Ensure that you have left enough time for HMRC’s Business Tax Dashboard to be updated. You may have sent real time submissions or payments that aren’t shown yet.

Using HMRC’s Business Tax Dashboard as an employer

 

Employer Payment Summary (EPS) and Full Payment Submission (FPS)

Check you have sent in all FPS and EPS submissions for the month. If you haven’t sent anything, HMRC may have created a specified charge, which is an estimate of what they believe is due based on your previous filing or payment history.

What happens if I don’t send payroll information on time

You should use an EPS to tell HMRC if you have no need to send in an FPS when no employees are paid.

Employer Payment Summary (EPS)

Ensure all FPS and EPS submissions include year-to-date figures. If you have made a mistake, you can correct it following this guidance:

Correcting payroll errors – current year

Check the date you sent any amendments. Any sent more than 14 days after   the end of the tax month they relate to will be taken into account in your     charge for the next tax month.

Confirm any EPS was submitted in time to be used in the month you intended.   The timing of the submission of an EPS, with the amounts you want to recover, determines which payment HMRC will adjust in that tax year.   This is explained in the table ‘EPS submission date’ at:

How you calculate the amount of PAYE to pay

Check your payments to HMRC match the amounts reported in your FPS and EPS submissions:

  • using tax weeks and tax months not calendar weeks or months
  • ensure you have correctly reported leavers and payments after an employee leaves or retires
  • confirm any negative amounts, refunds, advances and student loans are shown correctly
  • check you have not included any deductions you’ve made from subcontractors in an FPS
  • ensure you have not included your employee’s previous employments on your FPS

If you have an underpayment or specified charge for a month you’ve made   an error on and can’t correct until a later month, you will still need   to pay the outstanding amount or the amount you deducted if this is   more than the specified charge. You can adjust your payments in the   next month to reconcile with your year to date position.

How does HMRC calculate your charge?

HMRC has provided the chart below as a PDF (Portable Document Format)     – when you open it you can read it on screen, print it in a different size       or split the page across more than one sheet of paper.

RTI charge flow (PDF 580K)

Payments to HMRC

Check you have sent all your payments using the right Accounts Office reference number. You can find full guidance on paying and using the right reference number at:

How to pay PAYE/Class 1 National Insurance contributions/CIS

You can use HMRC’s Business Tax Dashboard to check that payments have been received and allocated correctly. Please note all payments are shown within a few (2-6) working days of HMRC receiving them if you provided the right reference number.

If after all the checks you still can’t reconcile the charge, contact:

  • the Employer Helpline on 0300 200 3200 if you have not had contact from someone in HMRC’s Debt Management; or
  • the Debt Management office that has contacted you by letter or phone about a discrepancy on your account.

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