SDWorx-Pay – Electronic Exchange (ElEx) & HMRC Real Time Information (RTI)

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What does the SD Worx ElEx Service do?

All employers who operate PAYE are obligated to report data to HM Revenue and Customs (HMRC) under Real Time Information (RTI). Employers may choose to undertake their own filing with HMRC directly or utilise the service offered via SD Worx ElEx.

Each time you pay an employee via SD Worx payroll, where the associated submission event and rule is in place, it will send information to HMRC relating to:

• Deductions, Income Tax and National Insurance and other Statutory Payments
• Starter information (such as start date and starter declaration along with P45 details where applicable)
• Leaver information
• Flexible drawdown of pensions
• Payments after leaving information
• Adjustment and correction data because of payroll change updates
• Payrolled Benefit In Kind information if you are utilising the optional SD Worx PBIK service (payrolled amounts and company car/fuel information)

Employers potentially need to include the details of all employees, including those who earn below the NICs Lower Earnings Limit (LEL).

Employers are required to provide employees employed on 5^th April each year a P60 or eP60 if they have been subject to PAYE.

Employers are required to pay to HMRC Accounts Office amounts owing and to send a new associated report Employer Payment Summary (EPS) to enable the recovery and compensation of Statutory Payments, claim the Employment Allowance (once off) and provide Apprenticeship Levy values. HMRC systems are not yet able to automatically calculate the offset amounts due to employers. If the payment due matches the detail on the Full Payment Submission (FPS) created from payroll and there is no Apprenticeship Levy due, then there is no need to send an EPS by the 19^th following the tax month completion.

Clean Data and Data Improvement

Providing HMRC with accurate employee and pensioner information helps ensure the right amount of tax and National Insurance Contributions (NICs). It also protects entitlements to certain state benefits and State Pension. Accurate data saves time – you will receive fewer enquiries from HMRC and employees/pensioners.

Information entered on payroll feeds into the RTI you send to HMRC systems. If you have the incorrect information it will result in the wrong data being applied resulting in wrong information coming out – ‘Rubbish In, Rubbish Out’. Also changing information significantly can lead HMRC into creating a second or duplicating records resulting in misbalance assumptions on payments due.

Changes to employee name and address

Employees may notify their employer of changes of name (due to marriage, divorce or other reasons), also changes of address (due to house move). It is appropriate to apply these changes to payroll and pension records.

Although the employer may be using new details, HMRC may ignore any new data changes notified by the employer alone. Employee or pension recipients must contact HMRC and notify them of such changes themselves directly. The preferred method is to use is the:

HMRC being notified of the correct address is a critical part of accuracy in the operation of Scottish and Welsh Income Tax, and the distribution of the Apprenticeship Levy to the correct devolved government administration.

The ‘on’ or ‘before’ principle.

Where the appropriate RTI submission event and rule are present, SD Worx RTI ElEx service reports information to HMRC following a live, committed or closed payroll process. Mid period changes and adjustments and share options are reported on the next regular submission in accordance with HMRC requirements for reporting revised year to date values along with information on the normal regular payments.

Where items are being reported late there is a requirement to provide a Late PAYE Reporting Reason against engine code E015 along with the date.

Late PAYE Reporting Reason & Date (RTI data item 154)

An entry is only required if the employee is to be reported with a Late PAYE Reporting Reason for activity that relates to a reported payment date that has passed (or will pass) at the point of the Full Payment Submission (FPS).

The reason and date are only reported on the FPS where the payment type is not ‘T’ for credit Transfer or where the Net Payment this time is zero. Where the payment type is ‘T’ and there is a payment this period, then no reason is reported, and the current standard payment date is reported.

The data item used is E015.

Maximum length 1 character followed by ‘/’ and an override this time payment date

Valid characters – A, B, C, D, E, F, G or H (space to remove)

Where:

• A = Notional payment: Payment to Expat by third party or overseas employer
• B = Notional payment: Employment related security
• C = Notional payment: Other
• D = Payment subject to Class 1 NICs but P11D/P9D for tax
• E = NO LONGER USED – RESERVED FOR FUTURE HMRC USE
• F = No working sheet required; Impractical to report. 
• G = Reasonable excuse
• H = Correction to earlier submission

Followed by an override reporting payment date in the format /DDMMYYYY

For example, ‘E015H/30042022’ indicates an item being for an individual employee is a correction with a reporting payment date of 30^th April 2022.

In some circumstances of making corrections where there is no payment this time, HMRC guidance asks for employers to report the last payment date. This would ordinarily generate a late reporting fine unless the employer also notifies a later reporting reason. SD Worx as a default reports the current period payment date even when there is no payment being made. The last payment date can be entered along with the later reporting reason.

Share Related Income

The taxation position on shares and share options has been a challenge for many years. The HMRC expectation was that tax and NICs would be accounted for at the point shares were available or vested by the employee, the reality is that neither the settlement of monies nor the employer awareness of the transaction taking place was ever a reality.

With the onset of RTI, HMRC have outlined their position on reporting requirements for Shares:

“Employment income paid in respect of employment-related securities (for example, on the exercise of share options). Where the employer is operating reasonable and currently accepted payroll/administrative practices and it is not possible to operate PAYE and/or calculate NICs to be deducted by the PAYE deadline, HMRC indicate that they will apply a common-sense approach in-year where employers in these situations have a reasonable excuse for not reporting the information by the end of the pay period or 19th of the following month. HMRC now expect that the late reporting would normally be no later than the next regular payroll date”.

Where the payment date is to be set in the past, then the late reporting reason B (Notional Payment – Employee related Security) is to be entered against data item E015 with a value of B along with the payment date to be reported for example ‘E015B/30042022’.

Payroll ID and RTI (the works number)

SD Worx use the RTI Payroll ID to identify an employee in interchanges with HMRC and the following format is used:

• “CPcccccceeeeeee”

Where:

• “CP” identifies SD Worx Payroll as the electronic exchange filing agent
• “cccccc” is the SD Worx Payroll number (leading zeroes will be present)
• “eeeeeee” is the SD Worx Payroll 7-digit employee number (leading zeroes will be present)

Any RTI submission which relates to an individual employment will contain this Payroll ID. Equally HMRC messages sent back to the employer will also contain this Payroll ID.

No National Insurance Number (NINO)!

If the employer is not provided with a National Insurance number, then they are expected to ask the employee for further information such as an old pay-slip or form P60. If there is no document available, then NINO verification will be requested when the regular RTI FPS submission is made.

Never make up a NINO, use temporary numbers or use defaults, if the correct number is not available but appropriate evidence is provided of entitlement to work in the UK, then enter “NONE” so that SD Worx now that they do not have a National Insurance Number and that it is not just missing, or leave the field blank, although the pay solution will take the view that you have forgotten to enter the NINO and may issue reminders.

I have employees who are not to be reported on HMRC RTI

If you have any individual on the payroll who is not subject to PAYE and therefore not reportable to HMRC via RTI, you may exclude them from reporting by setting Data Item T010 (Tax Basis) to the value ‘X’ for exclude. This should not be confused with the Week 1 / Month 1 basis which is indicated as a value ‘1’ on SD Worx systems.

Types of individuals or payments you would not report are:

• Payments to self-employed individuals or corporate institutions that are not subject to PAYE reporting
• Overseas employees not subject to PAYE reporting

Transferring an Employee from one payroll to another (same PAYE reference).

It is important that SD Worx understand when details are to be sent to HMRC and for what purpose. Who is a real starter and who has actually left?

When an employee is currently being reported to HMRC on RTI, but is being transferred from one payroll to another (whether from one SD Worx payroll or external payroll to another SD Worx payroll but within the same PAYE scheme), there is a requirement to prevent inappropriate new starter and employment leaver elements of RTI FPS being submitted to HMRC and equally the transfer of certain new values in addition to the standard payroll transfer values. For the payroll they may be a new starter or leaver, but are they really to HMRC?

N.B. Failure to operate transfers correctly will often result in duplicate record creation and mis-balance of payment on HMRC systems which leads to unusual inflated tax codes being issued to employee and debt chasing of you the employer.

When transferring employees, it is important to understand the type of transfer taking place and your employer structure as understood by HMRC. If a single employer has multiple PAYE scheme, please be aware that HMRC view is that each PAYE scheme is a separate employer in PAYE terms.

SD Worx pay solution offers special employee status markers against data item E001.

The status marker are as follows:

• E001 S – New Starter to this employer and PAYE scheme – a new start date is required.
• E001 C – Transfer into PAYE scheme -continuous employment.
• E001 M – Transfer out of PAYE scheme, pay this time and close.
• E001 L – Leaver – Pay this time and close.
• E001 Z – Leaver – Close, no pay.

To suppress the leaver segment of the RTI message being sent to HMRC use data item E110 with a value of ‘#’ and do not populate a leaver date. In the subsequent period set the Tax Basis to exclude by setting data item T010 to X.

To suppress the starter segment of the RTI message being sent to HMRC use the data item E105 with a value of ‘#’.

Also, when setting up a transfer employee the following items are important:

• (if applicable) T176 – the old payroll ID used on the former payroll – required for all payroll transfer cases

If the PAYE Scheme is different then it is not a transfer, but a leaver and starter which requires reporting to HMRC. The earnings histories would generally not be transferred from the old PAYE scheme to the new and the T176 Old Payroll ID is irrelevant as this is a new employment instance.

Additional information and RTI

With RTI employers are required to collect and provide payroll with additional information:

• Passport Number (engine code E012) – for any new employee who has provided a passport as part of the Right to Work evidence
• Hours Worked (engine code E058, E059 or E014): Information is needed on how many hours an employee normally works in a week (the contract hours). This aids with the assessment of Working Tax Credits

Payroll and RTI now additionally allow the reporting of the following:

• Lower paid, temporary, irregular and casual staff: Employers must now report payments to all staff no matter how much they are paid. If appropriate the employer may set the ‘irregular payment indicator’ (engine code E013) so HMRC does not assume that they have left employment.
• Change to employee working patterns: Employers may also need to provide information in certain circumstances, for example, if an employee takes unpaid leave, then set the irregular payment indicator (engine code E013) or else HMRC may assume that they have left employment (after 13 weeks).
• Payment to a non-individual (engine code T170)
• On-Strike (engine code T174) – when an employee has taken industrial action within the period being paid
• Unpaid absence (engine code T175) – Do not use

BACS – Hash and the Random number.

HM Revenue and Customs have announced that the BACS Hash is no longer required for FPS submission for payment dates from 6th April 2023 when the following guidance will no longer apply.

Where an employee is identified as being paid via BACS Credit Transfer (payment method ‘T’), SD Worx will populate the appropriate RTI random number in the BACS submission via the SD Worx BACS Bureau service and will also report the HASH formula value on the RTI submission to HMRC.

The Hash and Random number required by HMRC does not apply to non-Credit Transfer BACS payments and are not generated for any other payment method such as Faster Payments or other none BACS payments. Employers may need to review their payments process where they indicate an alternate payment method in the payroll but do make BACS payments outside of the SD Worx payroll service as HMRC will require a BACS random number and Hash.

The Hash is calculated by utilising elements of the employer and employee bank account details along with the Net Payment and the payroll generated Random Number reported on the BACS file. All the elements must be present in the payroll process to generate the Hash.

Use of the Credit Amendment functionality in changing any of the bank account details or payments will impact the Hash value calculated by PAY.UK and passed to HMRC and will result in the Hash not matching that provided on the SD Worx RTI submission as there has been an external change.

N.B. There is no legal requirement to pay employees via BACS Credit Transfer, only a requirement to provide the random number and hash where they are paid via BACS. Its use simplifies the evidence process required for Universal Credit claimants with the Department for Work and Pensions (DWP) and also Tax Credit claimants.

Taking on a New Employee

Starters are no longer reported to HMRC separately using P45, P46, P46(PEN) or P46(EXPAT) as these now form part of the regular SD Worx RTI submission. These were last used in the 2012/2013 tax year.

Employers must implement appropriate business processes ready to collect and record the correct personal when an employee or pensioner starts, HMRC will not accept late changes in subsequent RTI submissions.

When you take on a new employee and prior to their first payment, they must either provide you with an ‘In date P45’ (for tax year 2022-2023 this is one issued since 6^th April 2021), or you must get specific information from them and report it to HMRC the first time you pay your new employee.

RTI and form P45

Employers need the following details from form P45 received for a new employee and added to the payroll. This will result in the information being appropriately reported to HMRC via RTI when the employee is paid:

• Full name
• National Insurance number
• Previous employment leaving date
• Tax code (including week 1/month 1, if appropriate)
• Total pay and tax paid to date for the current tax year
• Student loan deduction status (you must then ask the employee for the Student Loan Plan Type – 1, 2, 4 or a postgraduate loan (PGL)

Using the right tax code for new employees and completing the starter declaration.

The tax code you need to use depends on when they left their previous employer and their starting date with you.

 When you enter a start date for a new employee you (the employer) must also complete a starter statement A, B or C (engine code T330)

P45 received after first payment

If the student loan indicator is shown on the P45, you request completion of the new starter checklist and ask the student loan plan type questions. You must deduct student loan repayments, unless you’ve been told by HMRC to stop, from the date the employee started with you. If the employee does not know the student loan plan type, then deduct using plan type 1.

If you have received a tax code from HMRC for this employee

• Do not use the tax code from the P45. Continue to use the tax code, and any previous pay and tax information, supplied by HMRC.

If you have not received a tax code from HMRC for this employee

• If the figures on the P45 (if dated after 6 April 2021) are incorrect, you should use the corrected figures
• Decide which tax code to use as detailed above
• Adjust the employee’s entries for the week you started to show the total pay and tax and tax to date from the P45 (if dated after 6 April 2021) – or the correct figures if those on the P45 are incorrect

Starter declaration received after first payment

• Add any personal details and store the information
• If you have not received a tax code from HMRC operate the code that relates to declaration A, B or C (refer to table above)
• If you have received a tax code from HMRC, continue to use it.

HMRC Starter Checklist

Please note that since the introduction of RTI in April 2013, the new HMRC Starter Checklist replaced the former use of the P46 or P46(Short) and in accordance with the information above, is required for completion even when a P45 is presented when an employee presents an ‘out of date’ P45.

Employers are permitted to create or use their own version of the form or incorporate the starter checklist questions into employer created induction or new starter documents.

The example or template starter checklist can be downloaded at:

Please note that it is possible to print blank copies of the forms or employers may email the form for completion by their employees as necessary.

Employers must ask these new employees to confirm whether:

• A – This is their first job since last 6^th April and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension
• B – This is their only job, but since last 6^th April they have had another job, or have received taxable Jobseeker’s Allowance, Employment and Support Allowance or taxable incapacity Benefit. They do not receive state or occupational pension
• C – They have another job or receive a state or occupational pension

New starter information must be retained by the employer for two years.

Starter Checklist – no statement ticked, or the employee has not provided a Starter Checklist or a P45(3)

HMRC rules ask that you give the employee a Starter Checklist for completion asking them to tick the relevant box and sign the form. If they have not, then the following entries should be made:

• Tax Code                     T000 0T (0T is the only valid code, not BR or D0)
• Tax Basis                     T010 1 (non-cumulative basis only)
• Statement                   T330 C

If they have ticked a statement and signed the form, then the following action should be taken according to the selected statement.

Starter Checklist – statement A

• Tax Code                     T000 1257L (based on tax year 2022/2023)
• Tax Basis                     T010 0 (cumulative basis)
• Statement                   T330 A

Starter Checklist – statement B

• Tax Code                     T000 1257L (based on tax year 2022/2023)
• Tax Basis                     T010 1 (week 1 / month 1 non-cumulative basis)
• Statement                   T330 B

Starter Checklist – statement C

• Tax Code                     T000 BR (BR is the only valid code, not 0T or D0)
• Tax Basis                     T010 0 (cumulative basis only)
• Statement                   T330 C

Student Loans

Employers must ask their new employee to confirm if they have left a course of UK Higher Education before last 6 April . If they have, then they must also find out if they have not fully repaid their student loan.

If the new employee responds “Yes” and indicates a plan type (1, 2 or 4) or that they had a postgraduate student loan to the student loan questions, the employer commences making student/postgraduare loan deductions using the appropriate plan type.

When is Starter Information sent to HMRC

Starter information may be applied to your payroll at any time. However, the information is not sent to HMRC until the employee is due to receive their first payment (as required by HMRC).

It is important to remember:

• Include all relevant information from the employee’s P45
• Only include pay and tax figures from the former employment if they are relevant
• Include your employee’s employment situation – statement A, B or C – the first time they are paid
• HMRC systems use the address associated with new employees so it is important that you provide a full and valid address especially as this can impact on whether they are considered a Scottish Tax payer
• If you re-employ a former employee in the same tax year, they must have a separate PAYE record and RTI Payroll ID – you must not re-use the same SD Worx payroll number for multiple employment instances

Retirement and Pensions

Pension and annuity payments are treated as income and treated in a similar way to earnings – if the pension scheme is registered with HMRC then there is no NIC deduction. Pension payments must be put through payroll although they are not the same as standard wages or salary payments to employees.

You won’t be paying the employee a pension.

If an employee retires and the employer is not paying them a pension in the same PAYE scheme, then the leaving details form part of the RTI submission.

You will be paying the employee a pension.

(a) Pension payments to employees not continuing in employment

Continue paying them using the existing payment information but with some changes:

• ‘Yes’ on the occupational pension indicator (Data Item E105 with value ‘P’).
• The date the pension started (Data Item E079)
• Amount of annual occupational pension (this is derived from Allowance 001 – basic pay)
• Tax code – unless you’re told to use a new tax code by HMRC, continue to use the same tax code you were using for the individual’s employment income, but on a week 1/month 1 basis
• Don’t deduct any further Class 1 NICs (set to NIC Category ‘X’)

(b) Pension payments to employees continuing in your employment

The employer must setup a separate record for the pension and use tax code 0T on a week 1/month 1 basis on the employee’s pension payment and continue to use the same code as before on the employment income.

Set the Occupational Pension indicator (Data Item E105 with the value ‘P’).

You must include with the first pension payment:

• The date the pension started (Data Item E081)
• The annual amount of the occupational pension – Derived from the allowance 001 permanent amount
• Tax code (Data Items T000 & T010) – unless you’re told to use a new tax code by HMRC, use code 0T on a week 1/month 1 basis

A New Pensioner.

Set up the pension recipient’s personal information in their payroll record

Set the Occupational Pension indicator (Data Item E105 with the value ‘P’). This value is automatically set on a pension payroll.

You must include with the first pension payment:

• The date the pension started (Data Item E081)
• The annual amount of the occupational pension – Derived from the allowance 001 permanent amount
• If they have a P45 Leaver Statement – the tax code from the P45 on a week 1/month 1 basis else if they do not have a P45 Leaver Statement use the emergency tax code (1257L for 2021/2022) on a week 1/month 1 basis

Pensioner gives you a form P45 late.

If the pension recipient gives you a P45 after you’ve started paying their pension and HMRC has already provided you with a new tax code, then you must destroy the P45.

If you have not received a new tax code from HMRC then follow the guidance that applies to employees who provide a P45 late.

New pension to deceased employee’s dependant

If the pension payment is to a dependant of a deceased employee, follow the steps outlined in the earlier section, ‘A new pensioner’ for when they have no form P45’; use the personal details and National Insurance number of the dependant, not those of the deceased.

Set the payroll indicator that they are a recently bereaved spouse or civil partner (engine code E077 with a value of ‘Y’ to set or ‘#’ to remove)

If a pension recipient dies.

Complete the leaver process as normal but additionally enter data against the new reason for leaving code “E090” with a value of “D” for died, e.g. “E090D”.

The leaving date should be set to the date of death.

As an option RTI lets you report that the payment is made to a non-individual against the RTI data item T170.

Do not issue any parts of the P45 either to the estate of the employee or HMRC.

If the pension passes to a body other than an individual

Payments to Personal Representative, Trustee or Body Corporate – that is, a third party or non-individual? Then:

• Tax code ‘BR’ (engine code T000)
• National Insurance number or ‘NONE’ (engine code N003)
• Gender as ‘M’ for male (engine code E041)
• Forename as ‘RP’
• Surname as the recipient body name (engine code E006)
• ‘Payment to a non-individual’ indicator as Yes (engine code T170)

Pensions – Trivial Commutation & Special Situations

SD Worx have introduced the following new codes to assist with RTI reporting where applicable for Trivial Commutation:

• Trivial Commutation Type (engine code T171)
  • A – Trivial Commutation lump sums (TCLS)
  • B – Small pot lump sum payments from personal pension schemes
  • C – Small pot lump sum payments from occupational pension schemes
• Trivial Commutation Amount (engine code T172)

When a pension scheme makes a once-off Trivial Commutation payment then the payroll must indicate to HM Revenue and Customs the Trivial Commutation amount. The value is automatically zeroised each period and is required to be entered for each trivial commutation payment. T171 and T172 are always used in combination.

HMRC expect the value to be whole pounds expressed in pence. Therefore, SD Worx systems will report any trailing non-zero pence entries as zeroes. i.e. the final 2 digits will always be treated as zeroes to meet HMRC requirements.

HMRC also provide additional guidance on special situations:

Flexibly Accessing Pension Rights.

From April 2015 those aged 55 and above have been allowed to access their money purchase pension savings as they wish.

Also, recent announcements have introduced changes to certain lump sum death benefits including:

• Uncrystallised fund lump sum death benefit
• Drawdown pension fund lump sum death benefit
• Annuity protections lump sum death benefit
• Any death benefit paid as a lump sum where the member was over 75 at the time of death
• Unused funds from a drawdown account, paid as pension, where the member is under 75 at the time of death 

From April 2016 and from April 2025 onwards where such payments are made then it is mandatory for the following data items are to be reported where relevant:

• T177 Flexibly accessing pension rights (originally introduced from April 2015)
• T178 Pension Death Benefits Indicator (from April 2016)
• T181 Serious Ill Health Lump Sum
• T182 Pension Commencement Excess Lump Sum (from April 2025)
• T183 Stand Along Lump Sum (from April 2025)

And the associated value items

• T179 Flexible drawdown taxable payment (from April 2016)
• T180 Flexible drawdown non-taxable payment (from April 2016)

Foreign Employees

PAYE tax and National Insurance Contributions (NICs) apply to employees who come from abroad to work in the UK. Even if someone working is employed by an overseas business, the UK employer may have to pay tax and NICs on earnings, but with some exceptions.

Right to Work – Eligibility to work in the UK

Before any employee works, the employer must check that they are eligible to work in the UK in accordance with Home Office requirements. If the passport is used as a piece of evidence of entitlement to work in the UK, then HMRC do expect that the employer will provide the passport number for the payroll to report using RTI (engine code E012).

The General Rule.

For employees coming to work in the UK, the UK employer is generally required to operate PAYE tax and NICs in the usual way, whether they are working on either a temporary or permanent basis.

Even if they remain employed by an overseas business and the UK employer does not actually pay them, the UK employer is still treated as the employer and has the same responsibility for recording and reporting earnings, calculating, recording, reporting and paying PAYE and NICs as for any other employee.

When an employee comes from abroad, the employee would generally follow the standard procedure for an employee without a form P45.

But there are exceptions and differences.

PAYE Tax Exceptions (Foreign Employees).

If an employee from abroad is a ‘seconded employee’, the UK employer is responsible for PAYE on earnings, but the rules on what tax code to use and Payroll reporting are different.

A seconded employee includes:

• Individuals working wholly or partly in the UK for a UK resident employer on assignment whilst remaining employed by an overseas employer
• Individuals assigned to work wholly or partly in the UK at a recognised branch of their own employer’s business
• All individuals within a dedicated expatriate or modified PAYE scheme

Employers must indicate any of the following which will be included in the RTI submission:

• If they are under an EPM6(Modified) Scheme for tax equalised expatriate employees (engine code T016)
• If they pay a student loan
• Their name (including surname/family name as well as first and second names), date of birth and gender as shown on the documents you used to check the employee’s entitlement to work in the UK
• The address at which the employee will reside when in the UK (not your business address) including a UK postcode
• National Insurance number if known

You must also indicate what their present circumstances are as follows (engine code T335):

• Value ‘A’ – they intend to live in the UK for 183 days or more
• Value ‘B’ – they intend to live in the UK for less than 183 days)
• Value ‘C’ – they will be working for you both inside and outside the UK, but will be living abroad

If they have a UK student loan, start making repayment deductions from their first payday.

This information can be stored in any way the employer prefers but must be kept for at least two years. HMRC has a model Expat Starter Checklist to use (replacing the former P46 EXPAT):

Using the right tax code for a seconded employee.

Check the table below to see which tax code to use for your employee:

Employee present circumstances	Tax code to use for 2025-2026 (engine code T000 & T010)
(T335 A) I intend to live in the UK for 183 days or more)	1257L cumulative
(T335 B) I intend to live in the UK for less than 183 days	1257L week 1/month 1
(T335 C) I will be working for the employer both inside and outside the UK, but will be living abroad	1257L week 1/month 1
(T015 Y) EEA citizen	No longer to be used
If your employee does not give you information about their present circumstances before their first payday	0T week 1/month 1

Shared Parental Pay (ShPP) & RTI

Where there any ShPP Birth cases the following data items must be present to report the details of the mother or partner to HMRC/DWP.

These can be found on the ShPP claim and are:

• Mother’s First Name (M781)
• Mother’s Second Name (M782)
• Mother’s Surname (M780)
• Mother’s NI number (M783)

Or

Where any ShPP Adoption cases exist, the following data items must be present to report details of the mother or partner to HMRC/DWP.

These can be found on the ShPP claim and are:

• Primary Adopter’s First Name (M781)
• Primary Adopter’s Second Name (M782)
• Primary Adopter’s Surname (M780)
• Primary Adopter’s NI number (M783)

Leavers

Employers no longer report leaver details separately to HMRC. When an employee leaves they must still be given the form P45 Leaver Statement, but the employer no longer sends P45 part 1 information to HMRC either electronically or on paper.

The leaving date is notified to payroll and this data is included in the next regular submission of RTI data to HMRC.

To prevent or suppress the leaver segment being reported, enter data item E110 with a value of ‘#’.

If an employee who has left then changes their mind, or they were made a leaver by mistake, the employer should continue making payments on the same employment record but do not enter a new start date (remove the leaving date). However, if the employer has already given the employee a P45, then they need to treat them as a new starter with a different employment record (a different Payroll ID).

Payments after Leaving (PAL).

SD Worx payroll offers facilities for payments after a payroll record is closed including share related payments.

When a leaver date has previously been notified to HMRC on a prior FPS submission and no P45 has been produced (T010 # has been applied) then use:

• E001 A – For additional payments after leaving (closed record) where a P45 has not been issued to the employee. The on-file tax code and NIC letter is operated. A replacement P45 may be issued to these employees.

Where a leaving date has previously been reported:

• E001 I – For Irregular payments after leaving (with no regular wages or salary for item such as an unexpected bonus or accrued holiday pay) – do not issue a further P45. The tax code 0T/1 is operated along with a single week of NIC contributions.
• E001 P – For a regular Periodic payment after leaving or where regular and irregular payments are mixed (including wages and salary) – do not issue a further P45

Where a prior FPS submission has reported a Leaving Date, the PAL details are reported with a ‘Payment after Leaving’ indicator and the original reported ‘Leaving Date’. The employer must not issue a further form P45 leaver statement.

The use of E001 A, I or P automatically applies the rules for both Tax and NICs including the checking of the leave date to ensure the correct Tax Code & NIC category letter application is in accordance with HMRC CWG2 requirements.

Please note that under RTI, HMRC have a view that an employee should not be treated as a Payment after Leaving if the leaver details have not previously been reported on an FPS submission – however, this is contrary to the HMRC guidance contained in CWG2 which stipulates the judgment point as being the issue of the P45 to the employee. The latter is often the application required under compromise or settlement agreements.

In either case, the SD Worx payroll has been modified to report the RTI Payment after Leaving indicator only if there has been a prior reported leaving date. Entry of a revised leave date will not change the original leave date reported to HMRC.

Death.

In the event of Death PAYE should be deducted using code 0T (on a week 1/month 1 basis) from any payments of earnings made to the personal representative of the deceased employee.

Complete the leaver process as normal but additionally enter data against the new reason for leaving code E090 with a value of ‘D’ for died, i.e. E090 D. Please note that Death is not reported to HMRC on the FPS as there is no facility provided by HMRC to do so.

The leaving date should be set to the date of death.

As an option RTI lets you report that the payment is made to a non-individual against the RTI data item T170.

Do not issue any parts of the P45 either to the estate of the employee or HMRC.

PAYE & One-off payments (including redundancy)

Different types of one-off payments to employees leaving your business are treated differently, and separate rules apply for working out the PAYE tax and NICs due. For NICs purposes, one-off leaving payments are either wholly liable to NICs or not liable at all. Unpaid salary and holiday pay are treated as earnings for the purposes of tax and NICs.

Some types of leaving payment are tax-free, some taxable in full, and some taxable only above £30,000. Most redundancy payments are tax-free up to £30,000 and not liable for NICs.

For a list of the PAYE tax and NICs rules covering the most common types of one-off leaving payments, read the HMRC publication CWG2, ‘Employer Further Guide to PAYE and NICs’.

There’s more information about redundancy on the GOV.UK website – see the link at the end of this section.

For any one-off payments where you have shown the date of leaving on a previous FPS – complete the following steps:

• Open a new employee record (this ensure that the FPS only reflects the one-off payment without any additional year to date values and that a new Payroll ID is used) by using data item E001 S & E001 Z & E001 I
• Data item ‘E001 I’ will ensure that tax code 0T on a week 1/month 1 basis is applied and that one week of NIC bandings are used in any NIC calculation for this one-off payment (if applicable)
• Do not enter starter information (such as start date and starter declaration) but supress the sending of start information by entering E105 #. Equally suppress the leaver information by entry of E110 #
• Make the payment against correctly set allowance elements
• You must not give the employee a form P45. Instead, give the employee a letter showing the date of the payment, the gross amount, and the PAYE tax you have deducted.
• If you make a further one-off payment, follow the steps above – treat it as a totally separate payment and use a different employee record for each subsequent payment.

Errors and Corrections

When making corrections where the ‘payment date’ should be earlier than the date of the FPS submissions, you must include the late reporting reason H (Correction to an earlier submission) against the payment using data item E015 along with the date to be reported.

If there has been a mistake in the RTI reporting to HMRC relating to an employee’s personal details such as date of birth or name, the employer is required to contact HMRC’s Employer Helpline. The employer must use the corrected details.

If an employee’s personal details have changed (such as their address or surname due to marriage or divorce), employers are advised to request the employee to contact HMRC. HMRC provide an online change of name or address facility to do this.

Employee’s personal details have changed.

If an employee’s personal details have changed (for example: address or surname) employers should advise employees to contact HMRC to report the change – see

The employer must enter the employee’s new details on the payroll records, so they are reported to HMRC in the next RTI submission. If the employee doesn’t report the changes to HMRC, then the new details will not be updated on the employee’s record held by HMRC.

Employee start date is wrong

Update the payroll record to reflect the correct start date. Note – the corrected start date is not notified to HMRC as this would result in duplication.

Employee leaving date is wrong!

Update the payroll record to reflect the correct leaving date. Note – the corrected leaving date is not notified to HMRC as this would result in duplication and all subsequent FPS submission will continue to report the originally reported leaving date.  

Electronic messages sent by HMRC to employers

The SD Worx RTI Electronic Exchange service allows employers to take advantage of automatic Electronic Exchange messaging in relation to Tax Codes (P6, P6B, P9), Student Loan (SL1, SL2), NINO verification responses and a new Generic HMRC messaging service (operational from October 2013).

If you receive an exceptions email file of messages, then you need to locate, correct and apply to the payroll manually bearing in mind any effective dates notified (for example, do not apply P9 data for a new tax year issued in February earlier than they are meant for i.e. 6^th April).

Will the employer still receive paper notifications?

No, the employee will still receive their paper posted copy, but the employer will now receive these electronically only. New codes will either be applied to the payroll automatically or will be sent to you by email for manual application if the Payroll ID notified is not correct.

How do I know what messages have been applied to the payroll?

All updates via SD Worx Electronic Exchange appear on the standard data audit-trails (amendment report) with a suffix indicator of “/ELEX” and changed by marked as “HMRC”. Also, the data is available for view in Pay results.

What happens with P6s and P9s where tax codes may change within a couple of weeks of being issued, they would normally take the latest one but how would this work in the electronic system?

Tax codes are sent electronically with an accompanying issue and effective date, so the latest and correct tax code is automatically applied in accordance with the HMRC issued priorities.

The NINO is different. What’s happened?

SD Worx RTI ElEx will apply the tax code to the employee that matches the RTI Payroll ID number else you would receive the tax code via email to apply manually. What will also happen is that the audit trail will point out that the NI number is different than that held on the system.

Where HMRC have supplied a valid NINO and SD Worx currently holds a value of “NONE”, in other words the NINO is not known, then SD Worx will automatically update the employee NINO with the valid value supplied by the HMRC.

I would like my bulk annual P9s/P6(b)s to be sent through electronically, what is the latest date by which this can be requested?

The HMRC create the annual P9 updates in February each year, so any new tax code orders for the 6^th April tax codes must be received by the SD Worx Electronic Exchange coordinator (CEEc) by the previous 1^st February.

Users do not need to request these annually, once the P9 flags have been set at HMRC then the messages will continue to be sent electronically unless changed.

HMRC notification in relation to National Insurance Numbers (NINO)

A National Insurance trace is initiated for any new employee where the NINO is not present on the first RTI submission.

HMRC will respond with one of the following types of instruction. If received by SD Worx and there is a valid Payroll ID, the request will be applied automatically (where appropriate).

Possible HMRC replies are:

• National Insurance Number is correct (no action is taken)
• Stop using the National Insurance number – it’s wrong (in which case SD Worx will update data item N003 with the value ‘NONE’)
• Use the National Insurance number in the notice in future (in which case SD Worx will update data item N003 with the number provided)
• National Insurance number you have queried is correct (no action is taken)

HMRC Misbalance / Penalty letter / Interest charges

HMRC systems are reliant on data being sent from employers to update the HMRC held records appropriately. Please note that records are only sent to HMRC when there is detail to be reported. Occasionally HMRC may believe an item is not present or duplicated for a variety of reasons (such as change of name, other identification or change in Payroll ID – the employee has moved from one payroll to another or one tax group to another etc.). These can cause misbalance and therefore debt chasing as values can be double accounted as a result. Equally failure on the part of the employer in making reclaims via the Employer Payment Summary (EPS) can result in misbalance. If this happens and the payroll results are correct and accurate, request a dispute charge case be raised for HMRC to investigate and resolve.

Leavers are not normally reported to HMRC once payment has stopped. If details have been changed after leaving or where you think a leaver details may be missing, you can force a submission to HMRC by applying data item E115 with a value of Y. This will ensure that this individual is reported on the next FPS submission.

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Last updated 22/4/2025 (PSP)