HMRC have provided updates on a number of PAYE areas, including guidance for employers dealing with situations where an employee believes the income figure on their tax credit Renewal Notice to be incorrect. In addition, updates have been issued in relation to how to avoid late payment interest, what to expect if a 2014–2015 PAYE/Construction Industry Scheme payment is late and recent improvements to HMRC's Generic Notification Service (GNS).

From 6 April 2014, HMRC use PAYE income information reported in real time to calculate tax credits awards. Tax credits claimants’ Renewals Notices will show the total gross pay for the year, and may therefore include income from more than one source. The Notice will explain that this has come from details their employer has sent to HMRC. The Renewals Notices will not show hours worked.

HMRC's guidance to claimants stresses that it is important they:

• check that the income details shown on the renewal notice are correct
• contact HMRC as soon as possible if they think the details are wrong

However, some claimants may contact their employer or pension provider if they think the income details shown are wrong. Guidance is now available for employers or pension providers in such situations.

HMRC also advise that some employers who participated in the 2012–13 Real Time Information pilot have been sent a PAYE Late Payment default warning letter (FP12) for the tax year 2012–2013 in error. HMRC apologise for the inconvenience caused and advise any employer receiving the letter to ignore it. HMRC have also provided additional guidance for employers who have not yet submitted all their 2013–2014 PAYE information.

The final date for sending Full Payment Submissions for 2013–2014 has now passed. Employers who still need to send PAYE information for 2013–2014 that they would normally have reported on a Full Payment Submission (FPS) must now report this by using an Earlier Year Update (EYU). To avoid a late filing penalty for 2013–2014, employers should ensure that they have reported all their 2013–2014 PAYE information to HMRC by 19 May 2014.

Employers should complete EYU in the same way as they would for correcting a payroll error. HMRC has published a helpful flowchart to assist with this.

Changes to GNS messages for 2014 to 2015

HMRC have announced that there are now three types of message as follows:

• Late filing, sent in-month as explained in April
• Non-filing, sent after the end of a tax month
• Late payment, sent each month after the payment date

HMRC advise that the first 2014–2015 non-filing messages relating to month 1 will be sent shortly. However, employers should note that as HMRC will be carrying out testing before releasing month 1 messages, there may therefore be a short delay in issuing non-filing messages. Therefore, employers who filed a ‘nil EPS’ for month 1 shortly after 6 May might still receive a non-filing GNS message for month 1. There is no need to contact HMRC in these cases.

Employers may receive a message if they have not sent:

• the number of FPSs that HMRC is expecting within a tax month, based on their previous filing history of how often they run their payroll
• an EPS to tell HMRC that no payments have been made for that tax month at the point that HMRC reviews its records to see whether a non-filing GNS message is appropriate

Employers may receive both a late filing and a non-filing GNS message relating to the same month. These messages should be used as a prompt to ensure that the business is ready to submit PAYE returns on time from 6 October 2014, when in-year penalties for failure to report PAYE on time will be introduced.