Amending details for a previous tax year

From April 2021 the Earlier Year Update (EYU) is no longer a valid submission type to make amendments to the tax year ending 5 April 2021, and instead a Year to Date FPS should be submitted.

To ensure that employers know exactly how to submit an FPS to amend a previous tax year’s details, HMRC’s Employer Bulletin 88, issued this week, provides additional guidance.  

Late reporting reason

‘Late Reporting Reason H’ 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.

The payment date that should be shown

As the format of the FPS isn’t changing it should be completed to include the latest payroll information, for example, payment date, monetary values and leaving date etc.

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 HMRC’s 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 the Month 11 FPS. The FPS should include the final pay date of 30 March 2019 (as the latest pay date in that tax year) and amended monetary values.

Correcting employee National Insurance contributions

From April 2021 if you need to correct an employee or employee’s National Insurance contributions for 2020-21 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 include:

• The subject: Overpaid employee National Insurance contributions
• 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.

Correcting Seasonal Worker payroll using Basic PAYE Tools

From April 2021 you will need to include the ‘irregular payment’ indicator on all submissions for any Seasonal Workers on your payroll. This will ensure that any future correction you need to make using a further Year to Date FPS is reported correctly.

If you did not use the ‘irregular payment’ indicator on your earlier submission, and need to make a correction, you should answer ‘yes’ to the question ‘Do you wish to submit this correction immediately?’ which can be found on the ‘Add an Employee Payment’ screen, within the ‘Other Details’ section.

Previous years

Acceptable methods of amending previous years are as follows:

• EYU only – Amendments to tax years ending 5 April 2018 and earlier
• EYU or FPS – Amendments to the tax year ending 5 April 2019
• EYU or FPS – Amendments to the tax year ending 5 April 2020
• FPS only – Amendments to the tax year ending 5 April 2021 and future years from April 2021