Reporting Employment Allowance to the HMRC - EPS

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Reporting Employment Allowance to the HMRC - EPS

4th March 2020

IRIS PAYE-Master, IRIS GP Payroll, IRIS Payroll Business, IRIS Bureau Payroll, IRIS Payroll Professional, Earnie, IRIS Earnie IQ

I've activated employment allowance for my company, how do I report this to the HMRC?

There is no requirement for you to report the value of the employment allowance deduction to the HMRC.

The only report you will need to send is an EPS (Employer Payment Summary). This will send to the HMRC an indicator that you are claiming the allowance and they will administer this at their end.

Please Note: From tax year 2020/21 you must send an EPS in month 1 if you are continuing to claim employment allowance.

You are not required to send further EPS submissions for employment allowance. (Usual EPS requirements remain if you are reclaiming statutory payments, CIS deductions suffered, etc.)

Please Note: The EPS report will not show a value for employment allowance reduction in payment. The EPS only reports a status ie “Yes” – we are claiming employment allowance or “No” – we are not claiming employment allowance.

Please Note: When printing the EPS summary for subsequent periods you will see the “Employment Allowance Status” reporting as “None”. This is because HMRC only needs to be informed when the employment allowance status CHANGES. Once you have sent an EPS marked employment allowance YES further EPS submissions will report the status as “None” even if you resend for a previous period. If you where to turn off employment allowance you next EPS would have the status as “No”. This is correct as per HMRC specification.

Employment Allowance Reporting FAQs:

Is reporting Employemt Allowance changing for tax year 2020/21?

Yes. From 2020/2021 tax year, you must send an EPS in month 1 if you are continuing to claim EA

Do I need to send an EPS for each month?

No. You only need to report you are claiming employment allowance once.

For which month should I send the EPS?

For the purposes of reporting you are claiming employment allowance it doesn’t matter. If you are not  reporting recovery or compensation of statutory payments just leave it as April.

Where are the figures/values for the employment allowance?

The values for employment allowance are not reported and will not show on the EPS. The file sent to HMRC contains a field that informs HMRC to expect you to reduce your class 1 NIC by £4000 for the tax year. That is all HMRC need. The amount you reduce your remittance by will show on your regular month-end summary / PAYE -Remittance report.

I’m trying to send the EPS but the system warns me all the values are zero / the same as last month.

If you are not reclaiming statutory payments or compensation the values on the EPS will be zero (or the same as the last month). This is correct. You still need to send the EPS so HMRC activates employment allowance on your account . Continue through the wizard and send the EPS.

I’m trying to send the EPS but the system warns me I haven’t performed month-end processing.

The month end processing routine will populate recovery and compensation amounts for statutory payment on to the EPS. If you don’t have any recovery or compensation to report you can ignore month end processing.

For further Employment Allowance queries check out FAQs here