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3043605 - PY-GB: Transfer from employment to occupational pension and HMRC works number

Symptom

Issues can occur when an employee transfers to payment of an occupational pension where the pension scheme is in the same PAYE reference as the employees’ payroll.

HMRC guidance is that if an employee is re-hired into the same PAYE reference then they do not allow the same Works Number (WRKNO) to report them.

The SAP payroll logic that was introduced approximately 20 years ago to allow transfers between payroll areas and PAYE references does still work and allows the same payroll number (PERNR) to be used. However, since the introduction of RTI this has caused issues with HMRC.

The logic for SAP is that the employee’s payroll number (PERNR) is used by the FPS to create the HMRC Works Number (WRKNO) on IT0065 which is then the unique ID used by HMRC.

If an employee leaves an employment and then re-starts under the same PAYE reference, a different Pay ID should always be used to denote this is a separate employment period. Operating the same Pay ID can cause issues as it will not be clear if this is the same employment period or a new one. This is an automatic process if there is a gap in the periods of employment, the FPS report after the re-hire will automatically append the HMRC works number (WRKNO) on IT0065 with an alpha character ensuring a unique Pay ID is reported

This principle also applies to starting a pension under the same PAYE ref i.e. the Pay ID must be different (it only has to be one digit different, for example add a P) to ensure pay and tax is correctly deducted.
As far as the employer is concerned it is just a transfer, but from an HMRC perspective they need to know the employee has actually left their position and are being paid a pension. This is important to avoid duplicate records at HMRC where they think the employee is working and receiving a pension they need to have a new works number - Pay ID on the FPS.


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Environment

  • Human Capital Management (HCM)
  • SAP R/3
  • SAP R/3 Enterprise 4.7
  • SAP ERP Core Component
  • SAP ERP
  • SAP enhancement package for SAP ERP
  • SAP enhancement package for SAP ERP, version for SAP HANA

Keywords

Works number, PAYE reference, pension, No change to payr.area & until &; paydays must be in ascending order, RPCALCG0, NICs, ST, P45 taxable pay, P45 tax paid, Aggregation, Cleardown, RPCP45GNRTI, RPCP45GNRTI_PBS, IT0065 , KBA , PY-GB , United Kingdom , How To

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