Taking over a payroll part way though a tax year
- Article ID
- Article Name
- Taking over a payroll part way though a tax year
- Created Date
- 1st May 2019
- IRIS Payroll Business, IRIS Bureau Payroll, IRIS GP Payroll, IRIS Payroll Professional, IRIS Earnie IQ
I am taking over a client payroll that has already been processed by another agent for part of the tax year, how do I set this up?
If you are taking over a payroll part way through a tax year it is vital you start with the correct information in your payroll system.
The best reports to start with are the employee’s P11 records. The P11 should give you a complete breakdown of the various PAYE elements you will need to set up the payroll correctly in your system.
Remember it’s not just pay and tax you need but the NIable pay, ee’s and er’s ni contributions AND the breakdown of the employee NIable pay into the 1a 1b 1c and 1d values.
A copy of the employee last payslip is NOT enough.
Depending on the payroll you may also need other details such as accrued holidays, outstanding AEOs, etc. All this information should be supplied by the previous payroll provider.
Current year leavers:
Current tax year leavers processed by the previous provider are not required to be entered into the system now we report via RTI. HMRC should have all the information they require about these employees from the previous payroll provider. HOWEVER, many customers feel more comfortable creating these leavers in the new software, that way there is a complete record of the whole tax year in one place. It’s really down to your personal preference, just make sure, if you do add the leavers, to save their leaving date in the software before calculating your first period.
When you create the employee records in the new payroll system it will treat them as though they are new employees. You will need to complete the starter declaration selecting the option “This is not a new employee”. You will see under this option a field “Previous Employee Code”. In here you should type the payroll code used for this employee on the previous payroll software. This will prevent HMRC interpreting this as a different employee and duplicating the Tax/NI liability.
NOTE: Once an employee has been included on a successful FPS you will no longer be able to type in previous employee code on the starter form.
One more thing to consider, make sure your company is set to start the payroll from the correct period:
IPP /Earnie – When you create the employees make sure you set the “Next Tax Pay Period” correctly on the “Period” tab of the employee details.
PAYE-Master / Payroll Business & Bureau Payroll: Set the payroll calendar to start at the 1st period you wish to process.
EPS: You will need the YTD values for statutory payment recovery and compensation along with the value of any CIS deduction suffered to type into the employer payment summary when sending the 1st one from your system.
FPS: When you send the first FPS in your system you will be asked if this is the first FPS for this company. You should answer no to this prompt, this isn’t the 1st FPS for this company, it is just the 1st one you are going to send.
Running Company Totals:
Under RTI it is not absolutely required to complete the running company totals when taking over a payroll. Previously this would have been vital to make the end of year P35 correct.
However, you may feel it beneficial to complete this extra information so your company data has the details for the complete tax year.
The apprenticeship levy is being introduced in the 2017/18 tax year. Once into the 17/18 tax year or beyond, if you take over payroll you must complete the “Pay Bill YTD” and “Levy Paid YTD” details. These will be found in the company details apprenticeship levy options.
For other Tax and NI details:
IRIS Payroll Professional / Earnie:
Go to “Company” > “Alter Company Details”
Click the button in the bottom left-hand corner “HMRC Details”
In the window here you can record the monthly net tax / NI and amounts paid to HMRC. You can also record the amounts claimed per month for employment allowance.
IRIS Payroll Business / IRIS Bureau Payroll:
Go to “HMRC” > “Month End Summary (P32)”
In the window here you can record the total of the PAYE elements as processed by the previous provider. These are typed into the top line labelled “Initial Figures”. You cannot break the values down per month, you just record the totals to date.
IRIS PAYE-Master / IRIS GP Payroll:
There is no way complete this information in these programs. It is not required for you to continue to process payroll and make RTI submission, the required year to date totals are taken from the individual employee records.
Looking for more help and support for your business? We run free training webinars throughout the month covering a wide range of subjects such as auto enrolment and holiday pay; you’re bound to find one that suits you.