PAYE Recognition Scheme

From October 2011 HM Revenue & Customs introduced a new PAYE Recognition Scheme

What is PAYE Recognition?
Why is HMRC introducing PAYE Recognition?
What is the benefit for me?
What will this cost?
How and when can we apply for PAYE Recognition?
For subsequent years how will you decide if the PAYE Recognition requirements have been met?
Will PAYE Recognition for the payroll values include an onsite testing visit at the developer’s premises?
PAYE Recognition instructions and scenarios

What is PAYE Recognition?

The new PAYE Recognition Scheme promotes the use of commercial payroll software products to file online with HM Revenue & Customs (HMRC). The Software Developers Support Team (SDST) within HMRC works with an ever widening range of developers, testing their software and helping them to resolve issues that might cause problems for employers and for HMRC. Software products that have gained PAYE Recognition for electronic submissions will be displayed on the PAYE Recognition list on the HMRC website. In addition there is an option to complete some basic payroll tests and this will be noted on the Recognition list. The SDST will support developers through this process.

Why is HMRC introducing PAYE Recognition?

HMRC is providing a scheme that is more flexible than the accreditation scheme and this will allow HMRC’s SDST to work with a broader range of payroll software developers.

What is the benefit for me?

Provided that your product can pass HMRC's tests, it will appear on the list of 'recognised' products on the HMRC web pages. Employers who wish to purchase payroll software are encouraged to consult this list:

Pay As You Earn (PAYE) Recognition - for payroll software and online forms

Choosing HMRC recognised PAYE software

PAYE Online for Employers: EDI software and forms

What will this cost?

There is no charge for this service.

How and when can we apply for PAYE Recognition?

Applications can be made now by sending an email to the SDS Team or by following the links at the bottom of this page.

The process of gaining PAYE Recognition is similar to the previous Recognition Scheme. Developers will run recognition test scenarios through their payroll software and submit the outputs to the Vendor Single Integrated Proving Service (VSIPS) or the Electronic Data Interchange (EDI) test service.

The test files will be emailed to SDST so that they can check the structure and content of the messages including the payroll values. As with the previous Recognition Scheme, developers only need to run the scenarios that their software supports.

For subsequent years how will you decide if the PAYE Recognition requirements have been met?

The first stage will be to check that the submissions pass all validation rules and that the test results supplied to SDST are acceptable.

Additionally, the recognition award for any of the PAYE strands will also be subject to an ongoing HMRC assessment of data issues or errors submitted to HMRC in the live environment.

HMRC has a responsibility to take reasonable steps to ensure that software on the PAYE Recognition list is fit for purpose. Where SDST feel improvements to the software are needed, we will seek a commitment from the developer to make these changes before awarding PAYE Recognition. SDST will continue to work with developers to achieve recognition for their products.

Will PAYE Recognition for the payroll values include an onsite testing visit at the developer’s premises?

No. However, SDST will contact and work with the developer to resolve any issues with the test results.

Once these are resolved and there are no significant issues, the PAYE Recognition list will show 'basic payroll values checked', along with any other items the software has recognition for.

PAYE Recognition instructions and scenarios

Version date 15 January 2013

Version date 15 January 2013

Version date 21 February 2014

Version date 21 February 2014

Version date 21 February 2014

If you have any further questions please contact the SDS Team