Guidance

Send an Employer Payment Summary using Basic PAYE Tools

Updated 27 April 2021

You can use this guide from 6 April 2021.

Image showing the Basic PAYE Tools home screen.

Introduction

This Basic PAYE Tools (BPT) guide is about how to make and send an Employer Payment Summary (EPS) and can be used by employers whose commercial payroll software does not include this option. Even the largest employer can use the BPT to submit an EPS if needed.

The screenshots in this guide are the main ones you’ll need to know about. Not all screens are included as there are some that most employers will not use because they apply to more unusual circumstances.

Due to continuing improvements, the screens in BPT may look slightly different to those shown within this guide.

Important

This guide assumes you use commercial payroll software to run your payroll and report information in real time. The EPS can be used when you want to:

• calculate your Apprenticeship Levy allowance
• claim a reduction in the amount you need to pay HMRC
• claim the National Insurance contributions employment allowance
• reduce the amounts shown on a previous EPS
• declare no payments made to an employee in a tax month
• indicate that this is your ‘final submission for the tax year’

You can find more information about these circumstances in the running payroll guide.

You can normally recover statutory payments by withholding your tax, National Insurance contributions and Construction Industry Scheme (CIS) deductions from subcontractors. However, if you do not have enough deductions to pay or recover the statutory payment, you may be able to apply for advanced funding.

Getting started

To send an EPS using BPT you must have:

1.Downloaded and installed the BPT software. If you do not have the software already, you can download it now.

If you already have the software, you need to use the latest version. To check this, make sure your computer is connected to the internet then open BPT. Select ‘Settings’ then ‘Update’ then ‘Check now’. If an update is available, accept the prompt to start the update.

2.Set up the employer

To help you do this, refer to the user guide first time users: download and install Basic PAYE Tools. This will show you how to set up and install the software, set up the employer database and employees.

Make sure you follow steps 1 to 6 only as you do not need to set up any employees for the submission of an EPS.

Examples of certain situations and instructions

Claim a reduction in the amount you need to pay HMRC

Follow:

Step 1 - select the correct employer and tax year
Step 2 - claim a reduction in the amount you need to pay HMRC
Step 7 - send the information to HMRC

Tell HMRC of whole tax months with no payments to employees

Follow:

Step 1 - select the correct employer and tax year
Step 3 - tell HMRC that you did not pay any staff wages in a whole tax month
Step 7 - send the information to HMRC

Indicate that this is your ‘final submission for the tax year’

Follow:

Step 1 - select the correct employer and tax year
Step 4 - final submission for the tax year
Step 7 - send the information to HMRC

Claim the new Employment Allowance - if you already use BPT

Follow:

Step 1 - select the correct employer and tax year
Step 5 - claim the Employment Allowance
Step 7 - send the information to HMRC

Claim the new Employment Allowance when you have not previously used BPT

Follow:

Getting started
Step 7 - send the information to HMRC

Calculate your Apprenticeship Levy allowance

Follow:

Step 6 - the Apprenticeship Levy - calculating the levy allowance and reporting
Step 7 - send the information to HMRC

Step 1: select the correct employer and tax year

From the ‘Home page’ select the correct employer from the employer list.

Image showing the Basic PAYE Tools home screen.

This will take you to the ‘Employer details’ screen as shown on the following screen.

Make sure you select the correct tax year at the top of the screen.

This needs to show the tax year you’re carrying out tasks for, such as sending an EPS.

Image showing the employer details screen.

If applicable, go back to examples of certain situations and instructions.

Step 2: How to claim a recoverable amount

At the end of the tax month

A tax month covers the period from the 6th of one month to the 5th of the next month.

After you’ve paid the last staff wages each tax month, but before the 19th of the next month you need to follow the next steps.

Calculate recoverable amounts for the tax month

Recoverable amounts

You may be able to reduce the amount payable to HMRC for:

• Statutory Maternity Pay (SMP) recovered, and there may be compensation due
• Statutory Adoption Pay (SAP) recovered, and there may be compensation due
• Statutory Paternity Pay (SPP) recovered, and there may be compensation due
• Shared Parental Pay (ShPP) recovered, and there may be compensation due
• Shared Parental Bereavement Pay (SPBP) recovered and there may be compensation due
• CIS deductions taken from your payments as a subcontractor if your business is a limited company

Calculate how much is recoverable

If you paid any SMP, SAP, SPP, ShPP or SPBP to staff during the tax month, you can use the appropriate calculators to work out how much of that statutory payment you can recover and the amount of any compensation. Make a note of any amounts.

All the calculators in BPT are accessed using the ‘Calculators’ link at the top of the screen.

Enter recoverable amounts

From the ‘Employer overview’ screen select the ‘Employer Payment Summary and recoverable amounts’ link from the menu.

Image showing the employer details screen.

Select the ‘Add a recoverable amount’ link from the menu.

Image showing the employer payment summary and recoverable amounts screen.

Enter the ‘Recovery date’. We recommend that you simply enter the last day in the tax month when wages were paid and the total for each recoverable amount that relates to that tax month.

The date entered here must be after any recovery date already entered.

Image showing the add recoverable amounts screen.

Complete the boxes as appropriate and select ‘Next’.

If you claim a reduction for CIS deductions make sure you only enter deductions suffered from the Limited company’s income as a subcontractor and not deductions made from its own subcontractors.

This takes you back to the ‘Employer Payment Summary and recoverable amounts’ screen which has now been updated to reflect the recoverable amounts that you just entered.

‘Outstanding submissions’ now shows (1) as entering the recoverable amounts has created an EPS. This will be submitted in step 7 - send the information to HMRC.

Image showing the employer payment summary and recoverable amounts screen.

An EPS has been created and it’s important that you send it without delay. Until you send the EPS you will not have claimed relief for the recoverable amounts. This means HMRC will expect you to pay the full amount of the deductions (tax, National Insurance contributions and student loan deductions) shown on the Full Payment Submission (FPS).

Now go to step 7 - send the information to HMRC.

If you submit an EPS after the 19th of the month

The EPS will not be taken into account for that period and you’ll have to pay the full amount due from your FPS. When the EPS is received it will be taken into account against the next period.

How to amend the recoverable amounts

If you make a mistake, for example, in month one you enter the wrong recoverable amount, you can change the amount.

From the ‘Home screen’:

• select the employer from the ‘Employer’ list
• select the ‘Employer Payment Summary and recoverable amounts’ link from the menu
• from the table in the centre of the screen, select ‘Change’ for the tax month where you made a mistake - do not select ‘Delete’
• amend the amounts by entering the correct amount for that tax month, and select ‘Next’
• this takes you back to the ‘Employment Payment Summary’ which has now been updated to reflect the recoverable amount that you’ve just entered

Now go to step 7 - send the information to HMRC and send the revised information to HMRC.

Step 3: tell HMRC that you did not pay any staff wages in a whole tax month

You must send an FPS every time you pay your employees.

If you do not pay any employees during a whole tax month (from the 6th of a calendar month to the 5th of the following month), HMRC will not know that and will still expect you to submit an FPS.

If HMRC does not receive an FPS covering any part of a whole tax month, you may be sent a demand for a specified amount. HMRC can calculate an estimate amount you may owe based on previous payments or returns.

To avoid this, you need to ‘Add a period with no payments to employees’ then send an EPS. This replaces the ‘Nil payslip’.

Tip:

You can report no payments to employees’ for:

• a tax month that has already ended
• the current tax month
• one or more future whole tax months, up to a maximum of 6 months, but the start date must be the first day of the next tax month

For example, on 15 November you can submit a ‘Nil Payment’ EPS for the period 6 December to 5 January. You cannot submit a ‘Nil Payment’ EPS for the period 6 January to 5 February.

From the ‘Employer details’ screen select the ‘Periods with no payments to employees’ link from the menu.

Image showing the employer details screen.

Select the ‘Add a period with no payments to employees’ link from the menu.

Image showing the periods with no payments to employees screen.

Enter the start and end dates.

Image showing the add periods with no payments to employees screen.

Move through the screens by selecting ‘Next’.

The EPS must be submitted to HMRC by the 19th of the month after the end of the tax month.

Now go to step 7 - Send the information to HMRC.

Step 4: final submission for the tax year

After you’ve paid the final wages for the tax year, you should send the final submission for the tax year declaration.

From the ‘Employer details’ screen:

• make sure you’ve selected the correct tax year from the top of the screen - if you want to send the final submission for 2019 to 2020 then you need to select tax year 2019 to 2020 first
• select the ‘Final submission for tax year’ link from the menu

Image showing the employer details screen.

Select the ‘Complete final submission for tax year details’ link from the menu.

Tick ‘Is this your final submission?’ and select ‘Next’. This action will create an ‘Outstanding Submission’.

Image showing the complete final submission for tax year screen.

Now go to step 7 - Send the information to HMRC and send the information to HMRC.

If applicable, go back to examples of certain situations and instructions.

Step 5: claim the Employment Allowance

From April 2014, most employers have been able to claim employment Allowance, it is now the responsibility of each employer to check whether they are eligible to claim this allowance before they make their claim. Further guidance regarding eligibility can be found on the GOV.UK website.

Also you need to be aware that from April 2020 you will have to claim this allowance annually as it will not be carried forward indefinitely as it had done in the past.

When you activate a new tax year in BPT, you will be presented with the following screen:

Image showing the employer details screen.

This new screen includes a warning message (indicated by an orange triangle) telling you that you have not ‘indicated whether you are eligible to and want to claim Employment Allowance’. It also directs you to the Employment Allowance link in the menu section on the left-hand side of the screen. When this link is selected a new screen will appear as shown:

Image showing the employment allowance screen.

This screen explains the new eligibility criteria which must be checked before making a claim to the Employment Allowance and has a link to a fuller explanation guide on GOV.UK. It also tells you that from April 2020 you will have to claim this allowance annually as it will not be carried forward indefinitely as it had done in the past.

When you have read the information on the screen select next to enable you move on in the process.

The following screen includes several new questions to enable you to establish that you are eligible to claim Employment Allowance for the year in question.

Image showing the employment allowance screen.

‘State aid rules do not apply’ should only be chosen when a business does not undertake any economic activity. For instance, some charities, community amateur sports clubs, or a person employing someone to provide personal care, may not be engaging in economic activity and therefore fall outside de minimis State aid rules. An example of this could be a small educational charity, employing staff to teach English as a second language for free in the local community. These employers are still eligible for the allowance, but it will not be classed as a de minimis State aid in these circumstances.

Most other employers do undertake economic activity, therefore de minimis State aid rules apply, and they should choose at least one of the four de minimis State aid business sectors when claiming Employment Allowance:

1. Agriculture
2. Aquaculture and Fisheries
3. Road Freight transport
4. Industrial and Other for everything else – examples of the types of businesses choosing this option could be services or utilities, merchandising, manufacturing. For instance a hair salon or restaurant, would come under this sector as they offer goods and services.

You now have to complete all sections on this screen, following the guidance above before attempting to move on. Once complete select next.

Now go to step 7 - Send the information to HMRC and send the information to HMRC.

Step 6: the Apprenticeship Levy - calculate and report the levy allowance

Apprenticeship Levy

From 6 April 2017 the way the government funds apprenticeships in England changed, with the introduction of the Apprenticeship Levy.

Only employers with annual pay bills greater than £3 million, (and some connected companies and charities with pay bills less than this amount), are required to pay the Apprenticeship Levy.

If you’re an employer (and you’re not connected to other companies or charities) and your annual pay bill is less than £3 million each year, no action is required.

For the purposes of the levy, an ‘employer’ is someone who is a secondary contributor, that is, someone with a liability to pay Class 1 Secondary National Insurance contributions on the earnings of their employees.

The levy is charged at a rate of 0.5% of your annual pay bill. You have a levy allowance of £15,000 each year to offset against the levy you must pay (subject to rules for connected companies and connected charities). This means you’ll only pay the levy if your pay bill exceeds £3 million in a given year. The levy is payable only on the balance of your pay bill over £3 million.

Read apprenticeship funding for further information.

How to report the levy

You must report your levy liability to HMRC if:

• you consider your annual pay bill will be over £3 million in the tax year 2021 to 2022
• you’re a company or charity which is connected to other companies or charities within a group and you’ve split the £15,000 levy allowance across the group and the apportionment of your allowance means that you know you’ll have a liability to pay the levy in the tax year 2021 to 2022

You’ll need to report your Apprenticeship Levy liability to HMRC each month. BPT has been updated to include the Apprenticeship Levy information you’ll need to complete.

The 3 fields are:

• Apprenticeship Levy due year to date
• tax month
• annual Apprenticeship Levy allowance amount

BPT has been updated to help you calculate your levy liability due year to date.

Alternatively, you can complete the Apprenticeship Levy calculation manually and just use BPT to report your Apprenticeship Levy to HMRC by completing the 3 relevant fields.

To begin the Apprenticeship Levy calculation process, select the ‘Apprenticeship levy’ calculator from the left hand menu on the ‘Employer details’ screen.

Image showing the employer details screen.

The following screen will appear and you’ll be asked whether you want to allocate the full levy allowance amount of £15,000.00 to this scheme.

Image showing the annual apprenticeship levy allowance amount.

The following screen will appear.

Image showing the apprenticeship levy summary screen.

Select ‘Add apprenticeship levy period calculation’ to take you to the calculation page on BPT.

Image showing the add apprenticeship levy period calculations screen.

For the purposes of the levy, an employer’s pay bill is all of those employee earnings liable to Class 1 secondary National Insurance contributions. This also includes all earnings below the secondary threshold.

The pay bill also includes the earnings of employees under the age of 21 and apprentices under the age of 25. It does not include any earnings where an employer is not liable to pay Class 1 secondary National Insurance contributions.

The pay bill figure should not include:

• earnings of employees under the age of 16
• earnings of employees not subject to UK National Insurance contributions legislation
• any payment which is not considered earnings for National Insurance contributions purposes or is officially disregarded, for example, pension payments which are not subject to National Insurance contributions
• benefits in kind that are liable to Class 1A National Insurance contributions
• payments to employees working abroad that are making employee only contributions

The calculation should be made and submitted on a monthly basis alongside your FPS.

When your calculation is complete you can view the Apprenticeship Levy summary as below.

Image showing the apprenticeship levy summary screen.

The Apprenticeship Levy annual report can then be viewed.

Image showing the apprenticeship annual report screen.

This is a view-only screen and is only there for your information.

The screen below displays all the Apprenticeship Levy calculation records for the selected employer. From here you can:

• add an Apprenticeship Levy calculation record
• view the Apprenticeship Levy report
• edit the annual Apprenticeship Levy amount
• edit an individual Apprenticeship Levy calculation record
• delete an individual Apprenticeship Levy calculation record
• enter an Apprenticeship Levy submission record

Image showing the apprenticeship levy summary screen.

Step 7: send the information to HMRC

From the home page select the:

1. Employer from the ‘Employer’ list
2. ‘Outstanding submissions’ link from the menu - you’ll see there is data to be submitted
3. ‘Send all outstanding submissions’ link from the menu.

Image showing the outstanding submission details screen.

On the following screen, select ‘Next’.

You’ll then see the ‘Submission authentication’ screen where you’ll need to enter your User ID and Password. Enter these and select ‘Next’.

You may know these as the Government Gateway User ID and password.

Image showing the BPT submission authentication screen.

The next screen indicates that the message is in the process of being sent to the Government Gateway.

Image showing the BPT submission status screen.

You should then receive the following submission success message.

Image showing the BPT submission results screen.

Annual reporting and tasks

When to send an EPS

You should send your final report in an EPS instead of a FPS if any of the following apply:

• you forgot to put ‘Yes’ in the ‘Final submission for year’ field in the last FPS however BPT will allow you to make an additional FPS submission if it’s before 19 April
• you did not pay anyone in the final pay period of the tax year
• you sent your final FPS early and you did not pay anyone for one or more full tax months in the last tax year