Each time staff are paid, employers must send data to HMRC in the form of Real Time Information (RTI). The design of RTI has a few quirks. In this post, I’ll explain a snag known as the duplicate employments problem.
There are some situations where employers must change an employee’s personal details on the payroll. This can be if the employee changes their name or gender, or if they are issued a new national insurance number. It can be a correction to something that was previously incorrect. It can also be an accidental change, for example when switching payroll systems.
When an employee’s personal details are changed, the employer sends an RTI submission to HMRC in the prescribed format. Unfortunately the data format used for RTI can be interpreted in two ways – either it is the same person with different details, or it is a different person. The only way to be sure which is correct is to ask the employer, which HMRC’s automated matching algorithm doesn’t do. As a result, HMRC’s system sometimes wrongly assumes it is a different person. This causes an extra record (or duplicate employment) for the same person on HMRC’s system.
To prevent the problem, HMRC advises employers not to change more than one item of personal information in the same FPS. Despite this, we’ve seen examples of duplicate employments caused by a change to a single data item.
Once HMRC’s interpretation of RTI data gets out of step with the employer’s view, narrowing down the problem is quite a challenge. Employers can’t see the data HMRC’s system holds for each employee. They can only see aggregate figures for each tax month and even these don’t show the latest position as they don’t update in real time. Often, an employer can see there is a problem in HMRC’s figures but has no way to identify which employees are affected. As our system holds a complete picture of the RTI data sent by our customers, we can usually help our customers narrow down the problem to find the most likely cause.
When HMRC’s system holds incorrect figures, HMRC helpline staff will often advise employers to send another RTI submission with the correct figures. This doesn’t solve the duplicate employment problem, as HMRC holds an extra employment record that the employee doesn’t know about and no amount of sending correct figures will delete the extra record.
Another quirk of RTI is that it doesn’t include the facility to delete an employment record. An employer can send an update so the figures on the employment record are all zero, but they can’t delete the record. Once an employment record has been created in error, only HMRC can delete it.
When the duplicate employment problem occurs it is very troublesome, but thankfully it is quite rare and only affects a small minority of employers. HMRC has also adjusted its matching algorithm since RTI was first introduced, making it less likely to produce duplicates.