DMBM519220 - Debt and return pursuit: PAYE RTI: submissions and charges: Employer Payment Summary (EPS)

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Contents

General
Allocation of EPS credit
No payments made to employees
Payments made to employees (no remittance due to HMRC)
Period of inactivity

General

An employer can submit an Employer Payment Summary (EPS) to advise HMRC that:

• no payments have been made to employees in a tax month (no FPS is due)
• they will not be making payments to employees for a future period (period of inactivity)
• they have ceased employing staff.

An EPS also tells HMRC that the employer wishes to recover:

• statutory payments
• NIC compensation on statutory payments
• Construction Industry Scheme (CIS) deductions suffered (limited companies only)
• an amount under the Regional National Insurance Contributions Holiday for New Businesses (NICs holiday).

All entries on an EPS submission need to be year-to-date calculations. A single EPS can be submitted to cover one or more months; it is not necessary to submit an EPS each time a statutory payment is made. An EPS does not include individual employee information.

It is expected that employers will usually submit an EPS for each month or quarter in which the recoverable amounts were paid. This is because the employer cannot reduce their monthly/quarterly payment to HMRC until they have provided HMRC with full details of the recoverable amounts.

EPS submissions received by HMRC between the 20th of the month and the 5th of the next month, will be sent to ETMP on the 6th. Submissions received between the 6th and the 19th are sent to ETMP daily.

Allocation of EPS credit

Employer doesn’t specify where EPS credit should go

Within certain parameters an employer can specify the tax month they want their EPS credit to be set against. If they don’t then, providing the EPS is submitted by the 19th of the month after the end of the tax period, RTI core and ETMP will offset the credit against the month just closed and the employer can reduce that month or quarter’s payment to HMRC. If the EPS is received after the 19th, they should reduce their next month’s or quarter’s payment. However, if the credit is more than the liability due to be paid that month then the credit will be used to clear any earlier debts or held on account for future debts.

Employer specifies where EPS credit should go

From 20 October 2014, employers can, within a certain three-month range, enter a tax month on their EPS return enabling an EPS credit to be allocated against a Full Payment Summary (FPS) return liability related to that month. Please note that:

• the tax month entry on an EPS return is not mandatory
• an employer may chose not to provide a tax month on their EPS submission.

There are time limits which apply to periods in which HMRC will accept a Specified Tax Month; these are set out below.

Tax month	Allowable period for submission (dates are inclusive)
1	6 March to 19 May
2	6 April to 19 June
3	6 May to 19 July
4	6 June to 19 August
5	6 July to 19 September
6	6 August to 19 October
7	6 September to 19 November
8	6 October to 19 December
9	6 November to 19 January
10	6 December to 19 February
11	6 January to 19 March
12	6 February up to six years after the end of the relevant tax year

The tax month is not reversible after submission.

The tax month cannot be recorded on an EPS return after 19 April for an earlier year as the EPS will apply to month 12.

An EPS submission can be accepted up to six years after the end of the relevant tax year.

No payments made to employees

An employer does not have to submit an FPS if:

• they have no employees in the current month
• existing employees are not entitled to receive any wages (for example they are on unpaid leave).

In these circumstances the employer should submit an EPS, completing the ‘No Payment for Period’ field. This notifies ETMP that no FPS is required and that no payment is due from the employer for the period covered by the EPS.

If an employer does not submit an EPS or FPS by the 19th, ETMP will expect an FPS and create a specified charge (see DMBM519260).

Payments made to employees (no remittance due to HMRC)

Where an employer makes a payment to an employee but the payment is below the level where tax and NIC is due (also known as the lower earnings limit (LEL)), the employer is still required to submit an FPS. The year-to-date tax and NIC totals reported on the FPS will be the same (or less if a tax refund has been made) as the previous FPS and ETMP will be aware that no payment is due from the employer.

Period of inactivity

Where an employer knows that they will not make payments to any employees for a future period of between one and 12 months, which may span more than one tax year, they can advise HMRC of a period of inactivity on an EPS. ETMP will then not expect any FPS submissions for that period and will not create any specified charges. No late-filing penalties will be charged for the same period either.

The employer completes fields to show the start of the period of inactivity (always 6th of the month) and the end of the period (always 5th of the month).

Period of inactivity set manually on ETMP

If the employer contacts HMRC and advises that they are not going to be employing staff for a specific period, you can set the period of inactivity on their behalf. Once set, you cannot amend or cancel it but an employer can by sending either an FPS or EPS. Where it is set, ETMP does not expect FPSs for that period. A period of inactivity is manually set on ETMP via Taxpayer Overview.

FPS or EPS submitted when period of inactivity set

Where the period of inactivity is set and an employer then submits an FPS, the submission is accepted by RTI core. The period of inactivity is cancelled for the tax month that the FPS relates to and any subsequent months.

Treatment of an advance during the period of inactivity

An employer should not be declaring a period of inactivity that covers months in which they are accounting for any statutory payments. Where such a period is declared and an advance is shown on the record with a due date in the future, the due date is brought forward by ETMP to the month before the period of inactivity. This means the debt comes direct to IDMS to ensure you can pursue the employer for either a potential late-payment default or FPS/EPS submissions default.