Using the correct employee addresses — new starters

As part of the August 2022 employer bulletin, HMRC have emphasised the need for employers to notify the correct employee address on the first Full Payment Submission (FPS). Failure may result in an individual not being correctly identified, duplication, application by HMRC of a Temporary Reference Number (TRN) and the individuals record being placed into a quarantine state.

The HMRC state:

When completing the first Full Payment Submission for new starters it is important that you obtain and enter your employee’s correct address and postcode and use the employee’s P45 information to record their previous pay, tax and student loan (if applicable).

If the employee does not have a P45 you can use the following starter checklist for PAYE.

If you use the starter checklist to add the employee onto your payroll records and you receive the P45 after you have received a tax code from HMRC, you do not need to update the previous pay, tax, or tax code on your payroll software, only update student loan details (if applicable).

Using the correct postcode and address is important because HMRC uses the postcode to verify the employee’s address. If you enter an incorrect address or postcode this could result in the employee’s address being changed on [HMRC] systems leading to correspondence being issued to the wrong address. An incorrect address held on HMRC’s systems may also affect the Department for Work and Pensions ability to process Universal Credit claims and issue correspondence to claimants.

For further information visit Tell HMRC about new employee.

Opinion – Should tax values from a late P45 be used?

Using values from a P45 issued in a period after the first FPS submission for them is problematical. Some employers will have experienced determination 80 tax liabilities passing from the employee to the employer as a result of late P45 value usage as HMRC may have issued a P6 tax code update and in mid flight the data has become intertwined. HMRC have again confirmed that employers and agents do not have to use these values as the P45 is late.

PAYadvice.UK 11/8/2022