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HMRC internal manual

PAYE Manual

Background: real time information (RTI): payroll alignment

Payroll Alignment was a data alignment process that every PAYE scheme passed through as the first step of moving onto RTI. This was needed to ensure that HMRC and the employer both held a consistent view of the employees on the employer’s PAYE scheme.

There were two ways alignment was processed depending upon the employer’s circumstances.

First Full Payment Submission (FPS)

In most instances, HMRC completed the alignment process using the information provided by the employer on their first Full Payment Submission (FPS). The difference between the first FPS and a normal FPS is that, while the latter will normally only provide information for employees who have actually been paid in the period, the first FPS showed every individual employed since the start of the tax year, even if they have left at that point or have not been paid in that period, to ensure that Payroll Alignment is completed correctly.

For further information see PAYE55001.

Employer Alignment Submission (EAS)

Where the PAYE scheme had more than 250 employees, HMRC required the employer to complete an Employer Alignment Submission (EAS) before the first FPS was sent.

HMRC compared the individual employment information in either the first FPS or EAS to the information held on the National Insurance and PAYE Service (NPS) for the PAYE Scheme. Where differences are identified, HMRC records were updated to reflect the information on the submissions. Where HMRC had an employment record that was not provided with the first FPS or EAS, NPS automatically ceased the employment record with an assumed end date of 05/04/CY-1. Where the FPS or EAS had an employment record that was not held on NPS, a new employment record was automatically created. If HMRC already held the employment it aligned and updated the works number where necessary.

NPS processing

With both types of payroll alignment NPS compared the information supplied and updated the customer’s record accordingly.

The alignment process could take up to 15 days to complete. Any FPS received could not be viewed on NPS until after the alignment process had been completed. During this period the [RTI data] button on NPS did not display information that was not updated on NPS.

When alignment was complete, NPS was continually updated with RTI information.