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In Year P45/P46 Rejection & The New Starter Process

The launch of RTI caused confusion among some payrollers with In Year P45/P46 rejection and the last minute change to the New Starter Process. Here Simon Parsons sheds some light on the situation…

In Year P45/P46 Rejection

Some minor panic ensued with some payrollers across the industry not knowing what to do, as employers mandated to file in real time found that they could no longer submit their forms P45/P46 data from the hangover of 2012/2013, and these submission messages were rejected.

The HMRC view was that as the new tax year had arrived these submissions were no longer allowed and were late (however, systems were not available for submissions for the last few days of the closing tax year due to HMRC IT Enterprise release down time). HMRC calmed the waters by stating these P45 were no longer needed – and there is some relative truth in this.

Details of these leavers will be on the 2012/2013 P14s, and also the EAS and the FPS would cause correct employees to be on the HMRC records. More details are available on the HMRC website.

New Starter Process

One of the last elements of clarification before RTI commenced was the fourth iteration of the New Starter Process to be notified to employers.

The announcement on 6 April 2013 confirmed the use of in-date P45’s (those dated from 6 April 2012) as opposed to out of date P45’s (those issued before); when the tax code may be used, uplifted or not used; equally when a starter checklist is required from the employee and when not.

Previous information from HMRC indicated that following the first payment to an individual, the opportunity of applying a later P45 or starter checklist was lost with employer being told to advise employee to call HMRC. Maybe premium phone lines are the new direct method of tax revenue. After consultation with representative bodies, the position changed and although original starter declarations: A, B, C are not changed, the employer is now allowed to accept and apply appropriate late tax code information dependent on whether HMRC had already issued a tax code or not.

However, be careful, the judgement point is when a tax code is received, or not, from HMRC. The reality is that software and service may well have been built and released on any four of the iterations of new starter process issued for the 2013/2014 tax year. HMRC indicate an acceptance of them all, but a preference for the latest.

Things should be settled for the next tax year…

Simon Parsons

Join our customer LinkedIn group Ceridian UK & HMRC RTI to keep up-to-date with the latest discussions and news and put your questions forward to us. Alternatively you can see our RTI Further Resources for more information on the legislation and Ceridian’s RTI Electronic Exchange service.

  • 24th April 2013
  • Payroll
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