Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: real time information (RTI): error correction - employers becomes aware of an inaccuracy

Where an employer becomes aware of an inaccuracy in an RTI return the law requires them to correct the inaccuracy. How they do this depends on the type of return and when they become aware of the inaccuracy.

How to correct a current year inaccuracy in a Full Payment Submission (FPS)

Where the employer becomes aware of an inaccuracy in an FPS before they are due to submit their next regular FPS, the guidance on the HMRC website tells them they can

  • correct the inaccuracy by reporting the correct year to date information (pay, tax and NIC year to date figures) on their next ‘regular’ FPS; this is often the easiest way to make the correction or
  • submit an additional FPS for the relevant pay period prior to the submission of the next ‘regular’ FPS. If the employer uses this option the ‘in this pay period’ box must only contain the difference between what had been originally reported and what the figure should be on that payment date. The year to date figures should be amended to reflect the correct year to date position for that pay period. The additional FPS should also be clearly marked with the payment date it relates to.

For example, before sending the FPS for month 6 the employer becomes aware that the pay for an employee was under reported by £100 in month 5. The employer can correct the inaccuracy using one of the two options above.

In some cases, an employer may also submit an EPS with the amended or additional FPS where there is a reduction in the amount they are liable to pay.

Correcting the inaccuracies on an additional FPS, or the next FPS, makes sure that the correct employee pay and tax information is passed to the Department for Work & Pensions (DWP) for calculating and adjusting payment of Universal Credit.

Interest

The employer must adjust the total pay, tax and NIC year to date figures to reflect the correct year to date position.

Where the employer corrects an inaccuracy by providing the correct year to date information on an additional FPS or their next ‘regular’ FPS and additional tax and NIC is due, if payment of the additional tax and NIC is made by the due date, no interest will be charged.

If payment is not made by the due date, interest will be charged from the due date until the date of payment.

If the employer has not corrected the inaccuracy by 19 April following the end of the tax year, they must submit the correct year to date information on an EYU.

For more information on when interest is chargeable on RTI inaccuracies, see COG904270.

How to correct a closed year inaccuracy

If an employer

  • does not correct an inaccuracy in a later FPS by 19 April following the end of the tax year or
  • only becomes aware of an inaccuracy on or after 20 April in the following tax year

the employer must submit an Earlier Year Update (EYU), see COG904240.

Note: An EYU can only be used to correct a tax year in which the employer operated PAYE in real time.

How to correct a current year inaccuracy in an Employer Payment Summary (EPS)

Where an employer discovers an inaccuracy in an EPS, they must submit the correct total year to date figures for all recovered payments (for example, statutory payments, CIS deductions suffered) on the next EPS.

How to correct a closed year inaccuracy in an EPS

Where an employer discovers an inaccuracy in an EPS in a previous tax year, they must submit another EPS to report the correct total year to date figures for all recovered payments within that year.

How to correct an inaccuracy on an Earlier Year Update (EYU)

Where an EYU is submitted and the employer later identifies the EYU is incorrect, a further EYU should be submitted showing the amount of the amendment from the first EYU.

Example

DEF Ltd submits a final FPS with a year to date figure of £20,000 for pay but later discovers that the figure should have been £24,000. The employer submits an EYU to show +£4,000 for taxable pay.

It is later identified that the actual pay figure was only £23,000. The employer submits a further EYU to show -£1,000.