Navigating the complexities of payroll reporting can be challenging for employers, particularly when it comes to submitting an Employer Payment Summary (EPS). This step-by-step guide aims to simplify the process, ensuring you comply with HMRC’s requirements while maintaining accurate records.
1. Understanding Employer Payment Summary (EPS)
Before diving into the submission process, it's essential to understand what an Employer Payment Summary (EPS) is. An EPS is a crucial payroll document that employers submit to HMRC to report various adjustments, such as statutory payments recovered, Employment Allowance claimed, or if no payments were made to employees within a specific period. The EPS ensures HMRC is aware of any deviations from the usual payment schedules reported through the Full Payment Submission (FPS).
2. When Should You Submit an EPS?
Timing is everything when it comes to submitting your EPS. You should submit an EPS if:
You’ve reclaimed statutory payments, such as maternity, paternity, or adoption pay.
You’ve received an Employment Allowance or apprenticeship levy allowance.
You need to report no payments made to employees within a tax month.
You’re adjusting the amount of PAYE, National Insurance, or student loan deductions.
The EPS must be submitted by the 19th of the following tax month to ensure HMRC has accurate information to calculate your liability correctly.
3. Preparing to Submit Your EPS
Before submitting an EPS, it’s vital to gather all necessary information. This includes:
Employer PAYE reference number.
Details of any statutory payments recovered.
Employment Allowance claimed.
Apprenticeship levy allowance details.
Any other adjustments or claims made.
Having this information readily available ensures a smooth and accurate submission process.
4. Using Payroll Software for EPS Submission
Most employers use payroll software to handle their submissions, including the EPS. Payroll software is designed to simplify the process, automatically calculating the necessary adjustments and generating the EPS for submission. To submit an EPS using payroll software:
Open your payroll software.
Navigate to the EPS section.
Enter the relevant information, such as statutory payments, allowances, and any other adjustments.
Review the information for accuracy.
Submit the EPS directly to HMRC through the software.
Using payroll software not only reduces the risk of errors but also ensures that your submission is timely and compliant with HMRC requirements.
5. Manual Submission of an EPS
While payroll software is the most common method, there may be instances where manual submission is necessary. This could be due to software limitations or specific circumstances unique to your business. To submit an EPS manually:
Download the EPS form from the HMRC website.
Complete the form with the necessary information.
Submit the form through HMRC’s online portal or via post.
Manual submission requires careful attention to detail to avoid errors that could lead to penalties or delays.
6. Common Mistakes to Avoid When Submitting an EPS
Even with the best intentions, mistakes can happen. Some common errors to watch out for when submitting your EPS include:
Incorrect or missing PAYE reference number: Double-check your employer PAYE reference number to avoid mismatches with HMRC’s records.
Reporting incorrect figures: Ensure all figures, such as statutory payments and allowances, are accurate and match your payroll records.
Late submissions: Remember, the deadline for submitting an EPS is the 19th of the following tax month. Late submissions can result in penalties and interest charges.
Avoiding these mistakes ensures your submission is accurate and compliant, preventing potential issues with HMRC.
7. What Happens After You Submit Your EPS?
After submitting your EPS, HMRC will process the information and adjust your PAYE account accordingly. This may result in a reduction of your liability or an adjustment to the amount owed. It’s essential to monitor your HMRC account to ensure that all adjustments are reflected correctly. If there are discrepancies, contact HMRC promptly to resolve any issues.
8. Dealing with EPS Rejections
Occasionally, an EPS submission may be rejected by HMRC. Common reasons for rejection include:
Incorrect or incomplete information.
Submission after the deadline.
Technical issues with the submission process.
If your EPS is rejected, HMRC will notify you of the reason. It’s important to correct the issue and resubmit the EPS as soon as possible to avoid penalties or delays.
9. Keeping Accurate Records
Finally, maintaining accurate records of your EPS submissions is crucial for compliance and future reference. Ensure that copies of all submissions, along with any related correspondence from HMRC, are securely stored. These records can be invaluable in the event of an audit or if discrepancies arise in your PAYE account.
Submitting an Employer Payment Summary (EPS) may seem daunting, but with the right preparation and tools, the process can be straightforward. By understanding the requirements, using reliable payroll software, and avoiding common mistakes, you can ensure your submissions are accurate and compliant with HMRC regulations. Remember, timely and correct submission of your EPS not only keeps you in good standing with HMRC but also contributes to the smooth operation of your payroll system.
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