HMRC recently published a What’s New on their Internet site on this subject entitled Real Time Information: submissions creating new employments and tax codes .
This explained that in instances where employers were only submitting part of their employee payroll on their first submission, whether an Employee Alignment Submission (EAS) or first Full Payment Submission (FPS), any live employments which were not included by the employer will be ceased with a date of leaving of 5 April 2013.
This in turn means that if the employee then appears on a subsequent FPS, HMRC will create a new employment – and issue a new tax code. This code will be incorrect, as it will not contain any benefits from the individual employee's previous tax code.
If an employer needs to send an EAS in parts, they must complete the 'number of parts' accordingly, otherwise HMRC will assume that the submission is complete and ignore any later EASs.
There is guidance advising employers that they should include all employees in their first Full Payment Summary, even if they were not paid in that period at http://www.hmrc.gov.uk/payerti/reporting/payroll-alignment.htm#3
There is also guidance advising that if an employer is sending their EAS in parts, they must enter a unique identifier for each part at http://www.hmrc.gov.uk/payerti/reporting/payroll-alignment.htm.
HMRC say that they appreciate that many employers are still getting used to reporting PAYE in real time. And with most of the large employers due to start later this year, it’s important that they highlight this issue now to help prevent them, and any other employers still due to start to report in real time, from making this mistake – particularly as it may disadvantage their employees
HMRC suggest that it is therefore very important that you read the First report - checking your payroll records match with HMRC's guidance very carefully.
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