Earlier Year Updates (EYU) were introduced in April 2014 to be used by employers to correct employee reported prior Full Payment Submission (FPS). An FPS would not be accepted by HM Revenue and Customs (HMRC) following 19th April. Any further changes were then required (and not before), to be made by EYU.
The EYU was known as a Delta submission with only difference values being reported. the process could work well, however, when employers were not aware of the standing values held by HMRC, then finding the Delta was very difficult, especially where inadvertent duplicate records were held on HMRC records. Occasionally employers were instructed to repeat the EYU submission, not understanding that multiple EYUs kept on adding to the result record held at HMRC increasing the PAYE account misbalances.
Then back on 19th April 2018, HMRC allowed continuing submission of an adjusted year to date values FPS, no longer rejecting late FPS submissions. Due to changes not being able to scheduled to the HMRC Basic Payroll Tools (BPT) in time, the option for EYU was kept for a further two tax years. The EYU was no longer permitted for use from the 2020/2021 tax year and onwards.
However, many HMRC helpline queries and even written instructions for tax years following incorrectly request EYUs to be submitted even though no longer valid. Such incorrect instructions have even been sent and received in recent months for in year corrections.
Where the online account to refers to Full Payment Submission values and Earlier Year Update bill values, neither was accurate or true label. The values were not the necessarily the actual values from either FPS nor EYU submissions, but values applied by HMRC and held on account including prior leavers (not on the submission file) and any inadvertent duplicates no matter how caused.
In recent year, the values labelled as 'Earlier Year Update bill…' on the account were differences between the FPS submission up to 19th April and any FPS received at a later post for that same tax year.
After receiving feedback from HMRC consultation groups around the continued use of incorrect labelling on the Employer liabilities and payments viewer still using the label 'Earlier Year Update ' (EYU) for adjustments to previous tax years when this ceased to be a valid submission type for tax years from 2020/21. This continued to cause confusion with employers, their agents and software providers, especially when attempting to resolve misbalance.
What tax years do accept EYUs?
- Year ended 5th April 2018 and earlier years: Adjustments can be made by submission of the EYU only.
- Year ended 5th April 2019: EYU or FPS will be accepted.
- Year ended 5th April 2020: EYU or FPS will be accepted.
- Year ended 5th April 2021 and later years: Adjustment can be made by submission of FPS only.
Consultation members offered some suggestions for a revised label - one of which was 'End of tax year adjustment'. HMRC have now made that change to their employer PAYE online service.
HMRC now confirm that "When looking in the online account, you will now see the new terminology where End of tax year adjustments have been made for 2020/2021 or later years. If you are reviewing 2019/2020 or earlier years, you will continue to see 'Earlier Year Update'".
Comment
It is good that HMRC have taken on the feedback of their consultation groups in adding improvements to the employers PAYE online account. Misbalance and duplications still cause significant disruptive correction activity for both employers and HMRC. Further improvements to RTI are urgently needed on a technology that is heading to be 12 years old.
It is great to hear that misleading terminology is being reduced, hopefully this will follow though with HMRC contact with employers being accurate In their use of current accurate terminology versus out of date terms and instruction for something that does not exist.
Even when EYUs were valid, you couldn't use them to correct anything in the current tax year!
PAYadvice.UK 4/7/2024
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