Completing HMRC Details

HMRC Details section is applicable to all tax types. The HMRC Details holds the relevant fields for determining the statutory deductions and also other information that would be submitted to the HMRC on the FPS. The HMRC details section has its own validity period to keep track of when these details change.

The HMRC Details section maintains the following data:

National Insurance (NI) Number. This is the unique identifier used by the HMRC to identify the payee. It is optional to hold the NI Number, but if it is not supplied, the payee's first name, surname, date of birth, gender and 2 lines of address must be entered so that the HMRC are able to identify the payee on their systems.
National Insurance Category. The NI Category identifies the amount of employee and employer national insurance contributions to be deducted from PAYE tax types. For Contractor and CIS tax types this will automatically be set to 'X' for no national insurance contributions. For further information relating to NI Categories please refer to the HMRC gov.uk website.
Apprentice flag. If the payee is employed as an apprentice and the payee is in an apprenticeship scheme, this will affect the NI category and the amount of employer contributions. Please refer to the gov.uk website for further information.
Deferred flag. If the payee has multiple jobs, and the other position wages are higher than the upper earnings limit, the payee can defer paying the higher rate contribution in the second job. The payee would need to provide the appropriate deferral certificate to operate this level of contribution.
Tax code (includes the regime, tax code and tax basis of Week1/Month1. For tax types of Contractor the tax code will be defaulted to NT (No Tax) and cannot be changed. The appropriate tax code to be used in the pay batch should be applied.
Student Loan. If the payee has a student loan, select the appropriate student loan type. For further information on how to operate student loans please refer to the gov.uk website.
Postgraduate Loan. If the payee has a postgraduate loan, change the indicator from No to Yes.
Irregular Employment indicator. The HMRC will automatically terminate the payee's HMRC record if no pay data is sent on an FPS for 12 weeks. If the payee is to remain active with your employer, this flag should be checked so that the HMRC do not end their employment record of the payee.
Normal Weekly Hours. This is used as the identifier for the normal weekly hours that a payee is likely to work and the appropriate category will be sent of the FPS to the HMRC. If left blank, this will default the category to 'Other'.
Is Verified. This flag is only visible to CIS tax types. This indicates that the user has verified the payee with the HMRC as to what tax treatment the payee should have. This is used to control when the user can change the payee's tax treatment. If the payee has not been verified, they cannot change the tax treatment to Standard or No Tax.
Verification number. This is only visible to CIS tax types. When the user verifies the CIS payee, the HMRC issues a verification number. This number is used in the CIS300 report.
Tax Treatment. This is the same field as Tax Code but is relabelled to Tax Treatment for CIS tax types. This will display the options of Standard, Higher, No Tax.

How to View & Update the HMRC Details

To view and update a payee's HMRC details, follow the procedure below.

How to View & Update the HMRC Details
	If you do not have the relevant payee record open on in the Payee Entry screen, use the Payroll > Payee > Payee Maintenance screen to search for and open the relevant payee record.
2.	Scroll down to the HMRC Details section of the Payee Entry screen or click on the quick link to this section.
3.	If the payee has not been processed in a pay batch, you can amend the data. For tax type Contractor, the NI Category and Tax code fields cannot be changed. The other fields in this section are not relevant to this tax type and so even if selected, will not have any impact of the payee's pay batch. For tax type CIS, you can change the Is Verified, Verification Number and Tax Treatment. If the Is Verified is unchecked, this will remove the verification number and change the tax treatment to Higher. If the Is Verified is checked, this will enabled the Verification number and tax treatment. A verification number is required if the Is Verified is checked. For tax type PAYE, you can change the NI Number, NI Category, Apprentice Indicator, Deferred Indicator, Tax Code fields, Student Loan, Postgraduate Loan, Irregular Employment and Normal Weekly Hours. Some of the NI Categories are based on the payee's date of birth and so if the payee's date of birth is incorrect, changing the date of birth could affect the NI Category. If the payee has been processed in a pay batch a new validity period needs to be added. Click the Add New Period button and select a new validity date . The validity date entered in the Add Validity Date field must be greater than the HMRC details Last Pay Period End Date. The last pay period end date that for that payee is displayed for reference.
4.	Make the relevant changes and click Save & Close to save the changes.