Payroll - FPS correction of errors

This guide will show you what you need to do to correct mistakes made in the previous PAYE tax year and when you might need to send an FPS Correction. Users of Liberty Accounts payroll will have access to FPS corrections for the 2020/21 payroll year once the final payroll of 2020/21 has been run and the year closed (although not necessary reported) and the Payroll rolled over to 2021/22

This process is used to report corrections for payroll years after 6 April 2020

If you are unsure as to the necessary corrections we strongly recommend you take appropriate professional advice.

This guide addresses the following:

Errors discovered before the 19th April following the end of the tax year
FPS Errors discovered on or after the 20th April following the end of the tax year
EPS Errors discovered on or after the 20th April following the end of the tax year
Processing an EYU (Earlier Year Update) submission
Entering the Updates Required
Unreported Leaver

Errors discovered before the 19th April following the end of the tax year

If you discover, on or before 19 April following the end of the tax year, that you have not submitted an FPS or you have reported incorrect year to date figures, you should submit an additional FPS with corrected year to date figures or an EPS (Employer Payment Summary).

FPS Errors discovered on or after the 20th April following the end of the tax year

If you discover the issue on or after 20 April in the following tax year, you should submit an FPS Correction. You can submit to correct FPS information for up to six years after you filed your original FPS. You can only use an FPS Correction for the tax years where you operated PAYE in real time, not if you filed P35 and P14s. Note amended forms P35 and P14 can be filed online for up to six years after the original forms were filed.

EPS Errors discovered on or after the 20th April following the end of the tax year

If you have reported incorrect information on an EPS in a previous tax year, you must submit another EPS to report the correct total year to date figures for all recovered payments within that tax year. You can submit an EPS for up to six years after you filed your original EPS.

Processing an Earlier Year Update FPS Correction submission

Note it is important to recognise that the FPS Correction corrects the figures sent to HMRC, it does NOT adjust the accounting figures stored in Liberty Accounts because these were as a result of payrolls processed. The user may therefore need to make appropriate accounting adjustments depending on the updates made. It is recommended that appropriate professional advice is sort if you are unsure.

Once the current year has been closed the Earlier Year Update facility will be available for amending that closed year. Navigate to Payroll RTI under the HMRC menu.

HMRC - Payroll Returns (RTI) - EYU

A screen offering RTI filing options is displayed. By definition an EYU is for a prior year so select the year to which the EYU is associated from the PAYE Year drop-down. For example if the new current year is the 2021/21 the EYU is to apply to 2019/20.

Click click the red + symbol and select FPS

A multi-tabbed screen is displayed to allow a user to enter the updates required.

A FPS Correction relates to a specific Employee so if there are corrections necessary for several employees then several FPS Corrections will need to filed.

Submission Details Tab

Ensure that the PAYE year is the one required and the Sender Type is correct and then select the relevant employee from the drop-down list.

If the relevant employee is not in the drop-down list navigate to the Manage Employees Screen and click 'Show All Leavers' and SEARCH. The list will show all leavers and will be subsequently be available for selection in the Submission Details Tab.

Payroll - Manage Employees

The details of the last filed FPS for that particular employee are then loaded into the information tabs. There is a message displayed at the top right of the screen confirming this.

Entering the Updates Required

Overwrite the figures with the correct information. When the FPS is filed those figures update the employee record with HMRC.

Payment Details Tab

Use this tab to amend payment and tax details.

NI #1, #2, #3, #4 Tabs

These tabs are used to correct national insurance errors. You may enter up to four category letters for one employee.

User Feedback Tab

Feedback from the System or HMRC on the process will be reported in this tab.

Submitting a FPS correction

When the necessary updates have been entered click SUBMIT to start the filing process.

The usual RTI filing control screen is presented.

When ready click SEND to file the submission, dismissing the warning. If the local validation is OK the status is shown as Queued. For feedback on process click View and go to User Feedback tab. The user will receive an email detailing success or failure. In the latter case, correct the issues and re-send.

Unreported Leaver

In the situation where a leaver has not been reported, firstly indicate that the employee should be processed as a leaver and enter the date. Do this by navigating to the particular employee in the manage employee list.

Payroll - Manage Employees - Payroll/Tax

You will need to know the PAYE tax code at the time they left. This may be obtained from the P11 report. The PAYE year 2016/17 will need to be closed for the EYU to be processed. Now navigate to the EYU screen.

HMRC - Payroll(RTI)

Change the PAYE year in the dropdown and select the EYU button. Click the ADD EYU button. Now complete the EYU by selecting the employee and providing the Tax Code at the time of leaving. Note you need to provide the tax code because for most uses of the EYU the tax code held is likely to be different to that held on the system at the time of filing. The leaving date is picked up in background.