We've recently seen in increase in unhappy employees due to Universal Credit impacts. There seems to be confusion in relation to guidance given to employees by HMRC/Universal Credit. We report information via the FPS to HMRC each month. None of the figures reported are an exact net pay figure inclusive of all deductions. RTI Data Item 59 is the earnings figure I believe is being passed to Universal Credit which doesn't always match the net pay figure on the payslip. However, we are getting frustrated employees being told otherwise by these organisations and that we as the employer have sent HMRC incorrect figures when in fact we have sent the figures as specified in the RTI data item guide. Is anyone else experiencing the same?
You will see from the legislation that when calculating earned income, Tax, NIC and any authorised payments under 'net pay arrangements' for pension contributions and payroll giving are deducted from earnings.
Deductions from net pay should be entered at 58B on the FPSs, these amounts would not be deducted in the Universal Credit earnings calculation. Your employees will need to contact the Universal Credit helpline on 0800 328 5644 if they believe that amounts included as earnings in their Universal Credit earnings calculation should be disregarded.