Nearly 90% of businesses made payroll mistakes in the last year, research suggests. Errors can easily translate into overstretched payroll staff, who need to follow up whatʼs gone wrong, and employees who are left wondering whatʼs happened to their wages.
A common problem area highlighted by HMRC is the creation of duplicate employments for employees. Where an extra employment record gets set up thatʼs identical to an existing live (or ceased) employment, things can get messy. Quite apart from employee tax coding issues, thereʼs the potential for apparent understatement of employer PAYE liability, and the possibility that HMRC might start debt collection activity.
Duplicate employments can be triggered in a number of ways. Key areas to watch are:
• procedures when a new employee starts work
• payroll ID changes
• when (and after) an employee leaves
• occupational pension and irregular payment fields.
Getting the starter notification and first Full Payment Submission (FPS) right, with accurate personal details, will avoid the need to file updates to employee name, date of birth and gender. Making sure that information is consistent will also help. If the initial FPS gives the name Zachary OʼKeefe, make sure thatʼs the name used in future, and that it doesnʼt get abbreviated to Zak OʼKeefe, or Z OʼKeefe, for example. HMRC notes that different payroll solutions give different capability and levels of control. But it still expects employers to understand whatʼs going on. Itʼs the payroll software that usually generates employee payroll numbers (sometimes known as employee numbers or employee unique payroll ID), for instance: but HMRC expects employers to understand how theyʼre generated.
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Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.