CIPP – Our advisory and policy teams have received several queries from our members asking why HM Revenue and Customs (HMRC) create a ‘new employment’ when a new employee number or Payroll ID is created from the employer/agents’ side?

For example, period 1, employee number is ‘12345’. In period 2, the employment remains the same, but the employer changes the way employee numbers are created, and this employee’s payroll ID (PID) is amended to ‘ABCDE’. Why is this duplicating employment? 

The policy team put the question to HMRC in the Employer and Payroll Group (EPG) forum and received a heavy technical response which can be found below.  

The policy team are here to break things down for you to make them easier to digest, so please see the below steps to follow should you need to change employee PID’s, ensuring there’s no duplication of employment records:

• Record the new PID in the ”Payroll ID” field on the FPS  

•  Record the previous PID in the ”Old Payroll ID” field on the FPS  

•  Tick the payroll ID update box so when the FPS is submitted it will match the record.  

 Please see the below response we received from HMRC:  

“When an Employer updates a continuing employee’s Payroll ID, they should be following the correct instructions in the RTI guidance that tells them to record the new PID in the “Payroll ID” field on the FPS then in the “Old Payroll ID” field to enter the previous payroll ID they are changing from. They are then told to tick the payroll ID update box so that when the FPS is submitted it will match the record. 

It is imperative that they record the old PID correctly, numerous instances where the Employer has NOT recorded the PID properly have led to duplicate records, or the FPS has incorrectly matched to a PID from a previous employment period with them and incorrectly reopened that record.  

Where there is a single continuing employment and the Employer has not followed the correct instruction and just updated the PID without recording the old PID or ticking the PID update indicator, the FPS when it is submitted will match to the previous FPS as the system will do a financial check.  

If there is more than one employment period for that employer in the year where they have multiple employments at the same source, then the system will not be able to match to any previous employment and set up another record under the same reference but with the new PID.  

Where a duplicate is created for a continuing source the instruction on our side if it is in the current year is to update the PID on the other record to the latest PID on the FPS received so they match. A monthly scan is run in the first week that will auto merge the records  

If the duplication has happened in the previous tax year or earlier and we have a ceased record that should be live and a duplicate record created by the Employer not following instructions as outlined, the user still needs to update the PID on the ceased record to the latest PID held for that employment and the case needs to be submitted by a user to their first point of contact to be listed for manual recovery.  

If an Employer follows the RTI guidance correctly this will avoid the creation of duplicates.”