Thanks for your reply, so we are correct in our sending the amended FPS files with the correct year to date figures and that we can refund through the payroll system the previously overpaid contributions.
How would you expect to see the refund on the employees FPS submission?
i.e. a late overpayment for 2021/2022 is processed in tax year 2023/2024 and the employees NI Able pay/UEL is reduced by £1000 and they are due a refund of £120.00
We have submitted the FPS correction for 2021/2022 and want to refund the employee £120 through the September 2023 payroll, the employees NIable earnings are £3255.44 and the FPS is reporting a UEL figure of £2497.44 on which £299.69 Employee NI is due, if we enter the £120 refund of NI for 2021/2022 that will make the contributions reported for September £179.69 which will be a perceived underpayment of contributions.
Will you reconcile the fact that the employee overpaid £120 based upon the revised FPS figures for 2021/2022 and underpaid £120 for 2023/2024?
This will also be the same scenario for the employer contributions
We are an employer of 8500 made up of several functions and a team within one of those functions of maybe 50 employees have recently received a successful outcome from an external inspection in a regulated service.
We have been asked if we are able to reward those individuals with a lunch/picnic to celebrate them and the work that went into that result by purchasing vouchers from a high street retailer to provide the food.
Does this fall within
"Non-cash vouchers that are exempt from NICs
These include vouchers for:
travel between home and work on a work bus
social functions, such as a Christmas party, up to £150 per head
childcare vouchers up to a certain amount"
And therefore not subject to Income Tax or NI?
We have recently had to process overpayments for the 2022/2023 tax year that has meant that employee and employer National Insurance refunds are due.
We have submitted amended FPS files for March 2023 with the correct YTD NI thresholds and employee and employer contributions for the affected employees, because HMRC advise employees
"Contact your employer and ask them to correct their Full Payment Submission. They’ll usually be able to refund you using their payroll software system.
If they cannot, write to HM Revenue and Customs (HMRC) after the end of the tax year you’re claiming for.
You’ll need to tell them:
your National Insurance number
why you overpaid
which tax year or years you overpaid in"
"Once you know why you’ve overpaid, you can claim your repayment from HMRC"
So does this mean we can't refund the NI through the payroll system for a prior tax year for the employee and employer or just the employer?
We have recently moved to a new payroll system that allows us to enter balance adjustments so we can enter a refund to allow the employee to receive the funds rather than write to HMRC and request payment and the same for employer contributions so should we utilise that or just send an amended FPS file with the corrected thresholds but with the original contributions and then write to HMRC asking them to issue a refund for employee and employer and not make the refunds through the payroll system>
We often have cases where overpayments occur due to late notification of maternity and our organisation would recalculate the pay that should have been received for that period and put the adjustments through the payroll as if you met the minimum earning/length of service requirements you would be entitled to Statutory Maternity Pay and they would be entitled to claim 92% of that back from HMRC so that would need to be reported to HMRC.
If the overpayment occurred in a prior year we would process that as a prior year adjustment and send an amended FPS to HMRC and we would also issue you a replacement P60 that held the correct year to date earnings for that tax year and detail the SMP you were due.