Correcting paycheques

Article ID: 2025127          Last updated: 1 June 2017

 

You must make sure the payroll figures and details that you report to HMRC are accurate. Sometimes though, mistakes happen - and if they do, it's important that you correct them.

The method used for correcting a paycheque depends on whether the erroneous paycheque has already been submitted to HMRC via a Full Payment Submission (FPS).

 

Correcting a paycheque that HAS NOT YET been sent via Full Payment Submission

You can delete and reprocess a paycheque that has not yet been included in a Full Payment Submission to HMRC. The new paycheque will be included in the FPS for the period, as normal.

(For details about how to delete a transaction, please click here)

 

Correcting a paycheque that HAS ALREADY been sent via Full Payment Submission

If you discover the error before you submit your next FPS

For example, you discover an error in a month 5 paycheque after sending the month 5 FPS, but before sending your month 6 FPS. You can correct the error in one of two ways:

  • Delete the affected month 5 paycheque and reprocess a corrected paycheque. A new FPS can be sent for the reprocessed month 5 paycheque. When submitting the new FPS, select the Late Reason: H - Correction to earlier submission.
  • Leave the erroneous month 5 paycheque in AccountEdge and adjust the month 6 paycheque for the employee to correct the error. The month 6 FPS for the affected employee will include the adjustment and correct year to date figures.

(For details about how to delete a transaction, please click here

 

If you discover the error after you've submitted a subsequent FPS

If you discover an error after you've submitted a later FPS, but still in the same tax year, you should correct the error by adjusting your next payroll.

For example, you discover before sending the FPS for month 7 that an employee was under or over reported pay of £100 in month 3.

To correct this via AccountEdge, you should leave the erroneous month 3 paycheque (and all subsequent paycheques) and adjust the month 7 paycheque to correct the error. The FPS for month 7 will contain the adjustment and correct year to date figures.

 

If you discover the error after the employee has stopped working for you

If the error relates to an employee who left your business, you must send a new FPS containing the correct year to date values as at their leaving date.

For example, in October you discover an error in the leaver's final June paycheque.  To correct this via AccountEdge, you will need to delete the leaver's June paycheque and reprocess a corrected paycheque. When prompted, submit the corrected June paycheque via the Full Payment Submission, ensuring that you select Late ReasonH - Correction to earlier submission.

 

Effect on Payments of Liabilities to HMRC

If you have reprocessed a paycheque that has resulted in you paying the wrong amount of PAYE/NIC liabilities to HMRC, you should adjust the amount of the PAYE/NICs payment for the next tax month or quarter to correct the earlier mistake.

AccountEdge will always calculate the correct liabilities in the Pay Liabilities window and on the P32 Report. Use one or both of these to confirm your total due liabilities for the affected period and/or year to date.

Effect on Payments of Liabilities to your Pension Provider

If you have reprocessed a paycheque that has resulted in you reporting or paying the wrong amount of contributions to your pension provider, you should contact your pension provider for details about how they would prefer you to correct the reported figures and any contributions paid.

  

Disclaimer: This information is of a generic nature. For specific advice regarding your particular circumstances please seek assistance from your Accountant or HMRC as appropriate.