Sending Amended FPS for Prior Years and Employer Issuing NI Refunds to Employees

In the case that an employee is due an NI refund from a prior year and the employer proceeds to refund this via the payroll system, the employer will normally send the amended FPS to HMRC showing the reduced NI EE and ER contributions for the prior year, the NI EE and NI ER refund is expected to be processed via the payroll system in the current payroll period. Is HMRC ok with the employer sending a reduced ER liability and sending a reduced future payment so that the employer can recover the overpayment?

Hi,
Thank you for your enquiry, Yes, if you have submitted amended FPS forms to us reducing the NIC contributions, you can reduce any future PAYE payments to us to recover  any overpaid amount.
Thank you.