PAYE Reconciliations and RTI data - Employers
Steve Wade
Partner - PAS Tax at EY | Chartered Tax Advisor | Expatriate and Employment Taxes
In my article PAYE Reconciliations and RTI data I highlighted issues with HMRC systems when dealing with PAYE submissions under RTI. In this article I highlight errors that employers make, and I thank HMRC for kindly allowing me to publish examples and statistics.
I stress that the article and views expressed are my own and not my employers nor the views of any of the representative bodies I am a member of and have the honour of representing in meetings with HMRC. I have also not asked HMRC to check for accuracy nor have I asked whether they are happy with any of the opinions expressed.
With the payrolling of benefits due to become mandatory from 6 April 2026, employers would be wise to review their current payroll operation to see whether any of the common errors are being made and can be eliminated.
HMRC use a number of rules to automatically match the PAYE data they receive from employers with the correct employee record. These include using the following data fields:
·?????? National Insurance Numbers
·?????? Full names
·?????? Dates of Birth
I hope it is self evident why it is important that the PAYE data submitted by the employer is matched with the correct employee record. It is, therefore, unfortunate that during the 23/24 tax year up to the end of February HMRC received:
1.?????? National Insurance Number
o?? Over 2,000 returns with the National Insurance Number AB123456
o?? Over 1,000 returns with the National Insurance Number AA111111
2.?????? Name
o?? 507 returns showing ‘A N Other’
o?? 128 as either Mr, Mrs or Ms Dummy
o?? 572 whose surname was ranging from ‘X’ to ‘XXXXXX’
o?? 824 with surnames of either ‘unknown’ ‘not known’ or ‘known’
3.?????? Date of Birth
o?? 6,946 Individuals aged under 1 year old but in employment or with a pension
o?? ?2,820 Individuals aged over 100 and in employment or with a pension
I feel I should point out to my younger colleagues that despite appearances I am not one of the 2,820 employees!
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When an employer does not have the data for the above fields HMRC guidance is to:
1.?????? National Insurance Number
o?? Leave blank if you do not have the NINO
o?? ?Do not use default NINO
o?? ?Always use NINO for the individual in question
o?? ?Validate this with official documentation e.g.???? HMRC or DWP documentation
2.?????? Name
o?? Enter forename(s) and surname in separate fields
o?? Check correct order of names
o?? Enter double-barrelled names into one field
o?? Always validate spelling with an official document e.g. driver’s licence, passport, etc.
o?? No initials
3.?????? Date of Birth
o?? Enter the full Date of Birth i.e. day, month, year?13/12/1964?
o?? Do not make one up
o?? Do not enter default a Date of Birth?
Hopefully, HMRC will publish more details on their plans on mandatory payrolling of benefits shortly as April 2026 does not give employers, software developers and agents much time to prepare. Many employers will find it a challenge to meet this deadline.
More information on the issues with payrolling benefits can be found in my CIOT Employment Taxes Voice article The end of Forms P11D – what does this really mean for employers?