01 July 2021

Lora Murphy ACIPP, CIPP policy and research officer, outlines a significant and long-expected change to PAYE reporting

The earlier year update (EYU) will no longer be a valid submission type in relation to adjusting pay as you earn (PAYE) information reported in tax year ending 5 April 2021 (i.e. 2020/21), or for any subsequent tax years. So, to amend data previously submitted for tax year 2020/21, and similarly for all subsequent tax years, employers must send a full payment submission (FPS).

The EYU was scheduled to be abolished from tax year ending 5 April 2020, and so for tax year 2018/19 employers could submit either a FPS or an EYU. This flexibility results from the pilot conducted by HM Revenue & Customs (HMRC) to confirm that the new process would not have any adverse impact on employers. The pilot was extended, which meant that businesses were able to send either a FPS or an EYU for tax year 2019/20 as well.

The extension of the FPS to allow both employers and pension providers to report revised year to date (YTD) payment data following 19 April highlighted how successful the new process is, as it removes unnecessary complexity, allowing HMRC’s systems to align with payroll records more quickly.

There is no intention for the format of the FPS to be altered in scenarios where it is utilised after 19 April following tax year end, rather that it will provide an update to the last period reported. To amend YTD figures, the payment date in the amending FPS must either match or be later than the latest payment date previously reported for the tax year in question. Where a FPS is being submitted in relation to a previous tax year, late reporting reason ‘H’ should be used. In the instance of selecting the correct payment date in the amended FPS, see the example.



An individual was employed all tax year and the final FPS for the year submitted on 30 March 2019, reflecting this date as the payment date. In June 2019, it is identified that an error was included in the FPS for month 11. The amended FPS should include the final pay date of 30 March 2019, as the last pay date in that tax year, and the adjusted monetary values should also be included.

To summarise, the submissions are as follows. Amendments to a tax year ending:

  • on or before 5 April 2018, should be made using an EYU only
  • 5 April 2019 from 20 April 2019, can be made using either an EYU or a FPS
  • 5 April 2020 from 20 April 2020, can be made using either an EYU or a FPS
  • 5 April 2021 and onwards, from 20 April 2021, should be made using the FPS only.

The change to using the FPS has been anticipated since real time information (RTI) was implemented. The previous process of submitting an EYU meant that payroll departments were required to manually calculate the difference between the initial submission and the altered position for each employee as that figure needed to be included in the EYU. The move has been welcomed by those whose payroll software does not include EYU functionality. Several products are missing this feature, which has meant that employers have had to utilise HMRC’s Basic PAYE Tools (BPT) in order to make amendments to previous tax years.

HMRC’s BPT was updated in March 2021 to reflect the changes to EYU. For tax years 2020/21 and subsequent years, there will no longer be the option of submitting an EYU through BPT, but they can still be submitted via BPT for tax year 2019/20 and any previous tax year.

How payroll teams will interact with this change will depend on the payroll software used. Software providers will have implemented these changes in slightly different ways, adapting their existing user interface to achieve the same underlying goal. Payroll teams and providers should work together to ensure that the communication is clear and concise and achieves a successful new process which is easily adopted within ‘business as usual’.

The employer payment summary is not impacted in any way by the changes to the EYU and FPS for amendments to previous tax years.

The change to the process was confirmed in the February and April 2021 editions of HMRC’s Employer Bulletin: http://ow.ly/4qOG30rI1j3 and http://ow.ly/qjqA30rI1jN, respectively. 


Share your experiences

Do you have any experiences relating to the EYU ending, and the FPS replacing it, that you would like to share with the CIPP’s policy team? If so, please send your feedback to [email protected]. Thank you in advance for your input.


Featured in the July/August 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.