At the time employees are paid, or before, RTI requires the FPS to be sent, giving details of the payments that have been made together with the associated tax, NICs and Student Loan deductions taken. However, whilst the FPS allows the employer to report the value of tax, NICs, SSP, SMP, OSPP etc, it does not provide information to HMRC of the monthly or quarterly payments that are due to be made (by the 19th, or 22nd if paying electronically). Remember, employers can make recoveries in respect of the statutory payments that they have made, at a level dependent on the legislation in force at the time.
The EPS, therefore, allows the employer to notify HMRC of the reductions it is allowed to make to the totals already submitted via the FPS. The EPS must be sent before the monthly or quarterly payment is due. HMRC will, then, expect the monthly or quarterly payment to be the sum of the payments due from the FPS less the reductions notified via the EPS.
The EPS can also be used to notify HMRC when there is no payment due to be made (a ‘NIL Return’), for example, when there were no employees or subcontractors in a pay period. It can also be used to alert HMRC that the remittance will not match the FPS total, for example, if there are amendments to be made from a previous tax year to be made with the next remittance.
HMRC are in the process of issuing guidance in the circumstance that EPS errors are made. The indication is that if there is a mistake, once spotted, the whole EPS can be resubmitted with the correction made and the correct year-to-date totals showing. Unlike correcting FPS errors, there is no requirement to show differences between the incorrect EPS and the correct EPS.
Further guidance is available on HMRC’s website here : PAYE55001
To summarise the HMRC guidance:
Employers will use the Employer Payment Summary (EPS) to report
For tax years 2014-15 the following will also be viewable
- Account Name
- Account Number
- Branch Sort Code
- Building Society Reference (only visible where there is an entry on the submission)
This submission will allow HMRC to offset these against any payments due.
The submission will also include
- Employer information (HMRC office number, PAYE reference, Accounts Office reference and the income tax year to which the submission relates)
- Payment information for a pay period
- Scheme information – in particular where an employer has cease
Note: If no payments are made within a pay period and no FPS is submitted, the employer will submit an EPS to show that no return or payment is due for that pay period.
Final submission for the tax year
An employer must complete and submit an FPS whenever they make a payment to an employee. When an employer submits a final RTI submission for the tax year on or before 5 April, whether it is an FPS or EPS, they must indicate that it is their ‘Final Submission’ for the tax year and complete the Questions and declaration statement as applicable.