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Getting your payroll right the first time - why employee information matters

HM Revenue & Customs (HMRC) has introduced a new way of reporting PAYE - called Real Time Information, or RTI.

From 6 April 2013, employers started reporting PAYE in real time. This means that information about all PAYE payments needs to be submitted to HMRC online each time a payment is made as part of the payroll process.

Before reporting in real time, employers and pension providers need to go through a payroll alignment process to help ensure that information on their payroll can be matched efficiently to the correct individual record. Improving data quality is important preparation for a successful transition to RTI.

Find out more about RTI

Operating PAYE in real time

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Getting employee data right - it's as easy as 1-2-3

Over 80 per cent of data quality problems are caused by holding the incorrect information about an individual's name, date of birth or National Insurance number. Getting this information right is good for everyone. The individual will pay the correct tax and National Insurance contributions and employers and HMRC will receive fewer queries.

Here are some practical tips to help you get your data right:

Name

Please:

  • Always provide the individual's full and official forename(s) and not just their initial(s).
  • Make sure that their forename(s) and surname are in the correct order.
  • Do not include any punctuation, such as hyphens, at the end of forenames and surnames.
  • Check that you have spelt the names correctly. For example, enter 'John Smith' and not 'J Smith' or 'Smith J'. Include a middle name if the person has one, for example 'John Michael Smith'. Simply putting an initial such as 'J Smith' makes it difficult to trace the correct account.
  • Check an official document to ensure that you have spelt the name right - 'Smith' and not 'Smyth'.

Date of birth

Please:

  • Always provide the correct date of birth. Do not enter a default date or incorrect date.
  • Check that the date of birth is in the correct format. Enter the day, month and full year of birth.

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National Insurance number

Please always enter the correct National Insurance number. Do not make up a number, use a default number or use a number belonging to someone else. The number must begin with two letters, followed by six digits and end with a letter which will be either A, B, C or D.

No matter what led to uncertainty over an individual's National Insurance number, you must act to ensure you give HMRC the correct number.

Here are a few examples of the types of things that can go wrong and leave you uncertain about an employee's number:

  • an employee only works for you for a very short time
  • an employee gives two slightly different numbers
  • an employee doesn't have documentation demonstrating their correct number

HMRC's real time information system does not currently recognise National Insurance numbers prefixed 'MA'.  Although these numbers are valid in the UK, a message will be sent to the submitter to say that they are incorrect.  Employers should ignore such messages and continue to use the National Insurance number supplied by their employee.

If you do not have a National Insurance number for your employee you can trace the correct number using the HMRC National Insurance tracing service.

Find form CA6855

The CA6855 clerical National Insurance number tracing service will be withdrawn on 31 March 2014. If you are unable to obtain an employee's National Insurance number using the guidance in the link below, you must still send their details on the first Full Payment Submission that reports a payment to them. However, you must leave the National Insurance number field blank for that employee. You must not use an incorrect or 'dummy' National Insurance number.

Making sure you use the correct National Insurance number

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Verification

To ensure the details you have are accurate, you should verify the information you need from an official source such as:

  • HMRC and/or Department for Work and Pensions (DWP) documentation
  • passport documentation
  • birth certificate
  • full UK driving licence (photo version)

Further tips about taking on a new employee can be found in HMRC's guide 'Taking on a new employee - first steps'.

Taking on a new employee - first steps

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Further information

Universal Credit on the GOV.UK website (Opens new window)

Support for Software developers - RTI Technical specifications

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