EOY Experiences

payrollpro

HMRC holds weekly conference calls on employer and agent EOY payroll experiences as well as letting us know about the HMRC view of filing.

Now that all employers have to file on line the AAT is interested in having feedback from you so that we can participate in some of these calls and express your concerns, or even pass on good views of the process.

Every year HMRC promise to make more resources available in their systems and more advisers to assist us all when filing so we do need to find out if they live up to or exceed their promises.

Please post brief information about your experiences and if necessary someone will contact you for specific information.

Thanks

Payrollpro
AAT representative on HMRC consultative groups

Annierags

Eoy

I tried to download the PAYE update to run the year end and it downloaded but did not do it properly I tried a second time, then rang the help number to be told it was busy and try another time and it cuts you off!

I will have to try again tonight.

Monsoon

We use third party software (12Pay) and at present have filed a few year ends with no hassle. The online Nil P35 notifier is good.

If we encounter any issues I will be sure to holler!

payrollpro

As an update I thought I would confirm that apart from the failure of the HMRC systems last month no one seems to be having a problem with on line filing this year - so far. I suspect this will change as we approach 19 May.

Can I remind everyone that the concession which allowed filing up to 26 May ended on 31 March this year. The deadline is 19th May.

May I also alert members to an HMRC requirement to submit a separate report of any and all payrolled benefits in kind. Contrary to HMRC's assurances that payrolling was a good way of dealing with BIK's and would save employer time we now find that they want a report, not part of the EOY and not in the P11D.

I have always advised members to enter payrolled BIK's on the P11D in the "Amount made good or from which tax deducted" box but clearly this is not what HMRC wants.

Payrollpro

cobbles

I have been using PAYE Tools and formally HMRC CD Rom for about three years now, this year I submitted all P35's via the PAYE tools using either my agent code or each company's online details, so far all have gone without any hitch. I have found the NIL return submission a great benefit (I still have clients still beening chased two years after informing HMRC by phone that their returns where NIL!! some have even had the bailiff's knocking!!

Rozzi Rainbow

I finally made a start on these today - all those bank holidays at the end of last month played havoc with our month end and I'm only just catching up! Managed two so far without any hitches, although still waiting for a client to come back to me with a figure before I can submit the second. Still quite a lot left to do, but it's always easier once I've made a start. And one of them is HUGE - leaving that one till last methinks!

Dcollins

No problems at all when using 3rd party software (Moneysoft).

I had one nil return for one client, so decided to try HMRC's new online notification. Received an automatic reply stating they'd received my notice that no return was due, and the employer's record would be updated soon. It was quick and easy, so all well and good, but...

Left it a month, record not updated, so to be safe I filed a nil return using Moneysoft. Filing a nil return seemed a much easier option than contacting HMRC. Have given direct feedback to HMRC.

payrollpro

Thank you for that. I may do some checking myself on that one, i have a client with a dormant company and i am assured that no return will be needed, but perhaps I will now have another look!

sloshed

One issue I have come across is when using the HMRC website filing facility. If you have an employee who was previously employed by an employer (for example say they left in 2008/09) You have to change the tax year to 2008/09 remove the left employment date to make them active. Then go back to 2010/11 and enter his details.

You also cannot delete any employees from the system if you have filed a form. I currently have a client in work who has approx 6 current staff and over 20 listed and the number is increasing every year.

Rozzi Rainbow

Everything was going so well until today - first failed return! Tried to resend only to find they'd already got a submission with that reference number. Got an email back that the first one HAD actually gone through, so that's good enough for me.

I've had problems with two directors today - different companies. The first one my software (Sage) only put the £421 in column 1a of the P11 NICs for the first 5 months only, even though the pay has been near enough the same all year (£450-£476). I think it's something to do with me not setting the director status up properly (he's been a director all year) so I reprocessed the last 7 months, and that got the £421 in column 1a but it made an adjustment in month 12, deducting part of the amount so the total isn't right. I think it might think he was an employee at the start of the year, and so only a director for part of the year, hence the year end adjustment. I gave up with it today but tomorrow I'm going to reprocess all the payments and hope that works!

The second company - the director started 20/9/10 and first got paid at the end of October £476 each month. So total pay = 6 x 476 = £2856. But again she is getting an adjustment in the final month on the P11 NICs - it's only showing half the amounts in the totals box. I'd expect column 1a to equal 6 x 421 = £2526 but it only shows £1263. And in the second column I'd expect 6 x 55 = £330, but it only shows £115.

I think I understand that as a director she could earn £5725 in total over just the six months without paying any NI - so £952 per month, although she would have been paying tax at this amount. But is it right that she has to earn the annual total to qualify for benefits £5045 in just the 6 months she has been a director? That doesn't seem fair if it is the case! Thanks to anyone who is still reading, and could shed some light on this.

Just two left to do tomorrow - the first director I gave up on, and a really big return.

sloshed

Hi

From the info supplied it appears that neither of them are correct if I can be of assistance please do not hesitate to PM me!

payrollpro

Yes sloshed I have a few concerns too but could I ask that we keep this in the public domain. There are many misconceptions about directors NIC's and I think more information would be helpful to others.

Also, it is right that if a person has paid less than the minimum NIC in a tax year it will affect their benefit position. The rule is that many benefit entitlements are based on the contributions record in the last full tax year prior to making a claim. If the year has less than the minimum NIC's paid in each tax period then the year does not count. This is normal and tends not to affect most people.

Taxpayers can maek voluntary contributions if the have an incomplete year.

Payrollpro

Rozzi Rainbow

Thanks a lot for your reply Payrollpro.

So in the case of a director starting halfway through a year, do they still have to make a whole year's contribution for NICs? Assuming that they have already made some from their employment elsewhere in the first part of the year. Is it right that only half of the NICs seem to be reported?

On a better note the large return I had to do seems to have gone ok. (Thank goodness!) I also had to complete an Employer's NICs Holiday return (for a different client) which seemed straightforward enough, although a bit strange that in this day and age it could only be filed on paper. My slight concern with this is that there was nowhere to record on the online P35 that the Holiday Return was to follow, so if the online return gets dealt with first it might seem that my client has underpaid her NICs. Hopefully they won't be too quick to send out a payment demand and will wait until the credit has gone through from the Holiday Return!

payrollpro

Good to hear that some things are going well.

You need to download booklet CA44 which specifically deals with company directors and if you look at page 8 it takes you through the process for pro rata earnings where the director joins part way through the tax year.

It also gives good guidance on using the alternative method and annual recalculation checks. Sounds worse than it is! My clients get a spreadsheet which not only shows the position for the whole year but also automatically recalculates at year end. The only problem comes if they decide to alter the pattern of payments mid tax year, which owner/managers have an irritating habit of doing, when the method of calculation has to change.

You are right about the NIC holiday scheme, another example of ministerial need exceeding the technological capacity, and as long as the holiday return is submitted within the timescales there will be no claim on the employer. Yes the P35 will show underpaid NIC but when this and the other information is applied to the account it was all wash out.

The AAT has been assured by HMRC that electronic means will be in place before the 2011/12 returns are due.

Payrollpro

Rozzi Rainbow

Thanks a lot for this - I've already located the CA44 booklet, but I haven't dared look at it yet, thought I'd try and sort some easier problems first!

I have managed to sort my first problem where the director has been employed all year - I reprocessed all 12 months and this time the P11 came out right with all the earnings showing in the totals of columns 1a and 1b, not sure what happened the first time round.

Just goes to show you can't always rely on your software doing everything right!

Rozzi Rainbow

Yay all finished now :-) Even managed to print and send the P60s for the large return, which I'd thought might not get done till tomorrow. Haven't quite got my head around the director's NICs yet, but I did send her return off yesterday as it was in case I couldn't get it sorted in time, so at least it's not late. (Maybe not the best idea I know.) Will look through it all tomorrow and if necessary send an amended return.

Hope everyone else's EOY has gone relatively smoothly.

payrollpro

Rozzi,

Your previous comment was spot on, you can contract out the payroll tasks to someone else, a software system, or a provider, bureau etc. As providers we can contract out the donkey work to the system, however none of us can contract out the responsibility for it being right nor the liability for it if it is wrong.

Payrollpro

Monsoon

Well, I've passed the 19th of May, all my P35s got filed and I didn't have any problems.
I was missing NI numbers for some employees, and my software allowed me to file with a DOB only, leaving the NIno blank. Which was a dummy DOB but if the client won't provide the info, there's not a lot I can do......

Rozzi Rainbow

Well I've managed to sort out all my director's NIC problems. What happened was Sage originally had them set up as employees not directors. When I realised, and changed them to directors, I thought it would automatically sort out the previous payments correctly, as I put the correct start date for being a director in. But of course the previous payments had already been updated and could not be changed, hence all the mess at year end!

I'll be on the ball now when I process director's payments, and make sure they are set up on Sage correctly - it's a bit annoying cos the option for director or employee isn't on the screen where the rest of the personal details are input, so I have to remember to go back in and alter it - it would be much more helpful if Sage could put this on the first screen!

Thanks for everyone's help with this.

payrollpro

Monsoon,

As you know I had the same problem with NINO's and DoB. I don't feel that we can use "dummy" DoB values and it would be unprofessional to make one up, so I merely impressed upon my client that the penalties for failing to file would be astronomical and she came up with some dates! How accurate they are is anyone's guess but I have to work with whatever my client tells me.

Anyone met the same problem with filing P45/P46's on line? HMRC system won't accept anything unless I put in both NINO and DoB. I did not realise the law had changed on this.

Payrollpro

sloshed

Hi payrollpro

I had the same problem as you with HMRC's online system not accepting unless you have the NINO and DOB. I had to counter this by using third party software and had to recreate the payroll so it would go, whereas normally I would just use the HMRC website to enter the totals. This meant that a P35 which should have taken an hour at most took 8 hours.

For your information some 2-3 (might be 3-4) years ago a colleague of mine went on a seminar that was hosted by HMRC at which they mentioned their new quality standard for paye. When questioned that clients do not always get this information their reply was if your client does not get the information they should not pay them!