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Incorrect real-time information tax codes are being issued for businesses that have submitted employer alignment submissions (EAS) or full payment submissions (FPS) that are incomplete or partial.
Examples include where an employer:
Incorrect real-time information tax codes are being issued for businesses that have submitted employer alignment submissions (EAS) or full payment submissions (FPS) that are incomplete or partial.
Examples include where an employer:
- has submitted only part of its employee payroll on the EAS and included the remainder of the employees on a subsequent FPS, or
- submitted the EAS in parts but did not indicate on the first submission that this is what will be happening, and HMRC treated the first part as the full alignment submission, or
- an employer used its first FPS to align (rather than an EAS) and did not include all employments on that first FPS.
In such cases, once alignment is complete, HMRC will treat live employments not included by the employer as ceased with a leaving date of 5 April 2013.
When the employer sends a subsequent FPS, the Revenue creates a new employment but the new record will not contain benefits from the individual employee's tax code. As a result, the code that is issued for the new employment will be incorrect.
Employers should ignore the incorrect codes and continue to use the previous code. If an employer or an employee receives a tax code where the benefits have been removed, they should contact HMRC's taxes helpline on 0845 300 0627 to get the code corrected.
The tax department advises employers to send details of all employees on their payroll or, if they are sending their EAS in parts, indicate how many parts they will be sending.
The head of payroll services supplier Payroll Alliance, Linda Pullan, said she raised the issue with HMRC earlier this month, following questions about new codes raised by members of her organisation and IReeN, the user group for online electronic exchange between employers and the taxman.
“In particular, one employer reported he had received 150 new codes out of a payroll of 800,” said Pullan. “HMRC responded quite quickly stating the issue was due to employees being omitted from the employer alignment submission (EAS).
She added, “Although I think HMRC have identified an alignment error that may apply to some employers, I am sure there is a far wider problem because employers have reported receiving multiple codes for the same employee.
“One business that received a number of tax codes is a small employer that did not carry out an EAS. I have asked HMRC to look at this again and I would urge all readers to write in if they are affected by this problem.”
