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If you have found out you have been using the wrong National Insurance letter code for one of your employees you will need to correct the records HMRC hold as soon as possible. The means of doing this depends on whether the error is from the current tax year or a previous tax year.

NI letter code errors from a previous tax year

Corrections need to completed by sending an Early Year Update (EYU). This EYU can either be completed through your payroll software or through the HMRC’s free PAYE software which can be downloaded online.

NI letter code errors from the current tax year

These letter codes need to be corrected within your current system. You will also need to backdate this to the start of the tax year for the previous payroll cycles effected. These changes will then be reported to HMRC on your next FPS (Full Payment Submission).

If you are still unsure about NI Letter codes or other payroll related issues it might be time to consider outsourcing your payroll.

If you’re thinking of outsourcing check out our case studies from current clients.

If you want to discuss anything further get in touch with us:

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