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HMRC, revised prior year EPS submissions uncovers a disturbing new trend

HMRC, revised prior year EPS submissions uncovers a disturbing new trend
Jack Simpson
Written by Jack Simpson
Wednesday, 02 October 2019 08:50

As a payroll provider, it is common practice for us to send revised employer payment summary (EPS) submissions to HMRC in respect of earlier tax years.

It may, for example, be the case that we need to report a different amount to HMRC in respect of a recoverable, statutory payment – like SMP – compared to what we originally advised (e.g. due to an employee overpayment that has since been redressed and reflected in an earlier year update).

Or we may find ourselves in a situation where a client hasn’t claimed Employment Allowance for a prior year – and has since advised us that they were eligible; in this situation, a revised EPS would again be required.

Another situation where we need to send a revised EPS is in the case of an amend to a client’s Apprenticeship Levy allowance level for a prior year, e.g. if there was some unused Levy allowance within a connected employer group on multiple PAYE schemes, and reflect this via EPS.

Letting HMRC know of these changes should be simple…

In theory, this should be a straightforward process.

HMRC guidance dictates that revised EPS submissions are the way to tell HMRC that employer-related payment amounts for a prior tax year have changed.

Recently, however, we have found the reality of this process far from plain-sailing. Instead, we have encountered various instances – especially when we have been sending a revised prior year EPS to amend a client’s Apprenticeship Levy information – where HMRC’s systems fail to process the submission.

What is the problem?

The issue seems to be as a result of a technical, or ‘mapping’, issue at HMRC’s end and requires a referral to an HMRC technician via their Employer Helpline in order to resolve.

The consequences of HMRC failing to process a revised EPS for a prior year correctly can be unfortunate.Should the revised EPS data reduce an employer’s liabilities for an earlier year, and should we then offset the difference against their current year liabilities, then it can lead to an alleged underpayment situation if HMRC have somehow lost the revised prior year submission that we filed.

If this situation does occur, Dataplan will rigorously challenge any suggestion of an underpayment, liaising with HMRC to redress the mapping issue and ensuring that any interest or other charge is appealed.

Here at Dataplan, we are well aware of how pedestrian and clunky HMRC IT systems can be, but we will continue acting in accordance with HMRC guidance, file revised prior year EPS submissions where necessary and offset any resulting credits as appropriate. No employer or payroll provider should have to work within confines imposed by failings on HMRC’s part and we will always maintain a robust stance on such matters.

Jack Simpson

After completing his studies at the University of Warwick, Jack joined Dataplan in September 2015 as a Graduate Trainee Payroll Professional. Prior to this, he performed a holiday job at FB Wealth Management Limited, Dataplan’s sister company, on four separate occasions.

Outside of work, Jack is a follower of Nottingham Forest Football Club and takes a keen interest in politics and current affairs.

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