Employment Allowance 26/27

Hey, Richard. To help me look into this properly, could you confirm two things? First, are you on Payroll Core or Payroll Advanced? Second, have you updated your Payroll Settings specifically for the new 26/27 tax year to include the Employment Allowance?

Normally, once that toggle is enabled, the credit is calculated and generated automatically on the Employer Payment Summary (EPS). The EPS itself auto-generates monthly, though you may still need to hit submit manually depending on your current Payroll setup.

Here's how to check for both plans:

If you're on Payroll Core, you'll have to head to Payroll Settings and select UK Tax. From there, scroll down to find the Employment Allowance section, select Yes, I qualify, and enter the exact credit amount you've used since April 6th of this tax year.

If you're on Payroll Advanced, go to Payroll Settings and select HMRC Settings instead. From there, make sure that your Employment Allowance is actually toggled on 26/27 tax year. At the bottom, tick Yes to include the Employment Allowance in your journal entries.

Once those settings are confirmed, if any manual adjustments are needed on the account side, you'll have to directly get in touch with our Payroll Live Support team. While we can't directly assist you with account mapping adjustments, our Payroll Experts have the backend access needed to further investigate and make those specific adjustments for you.

Let me know how it goes for you.

The client is on Core Payroll and the Employment Allowance is enabled in Payroll Settings for 26/27. The EPS to enable EA has been submitted and accepted. I'll post the journal for Employment Allowance manually and check the balance sheet value matches the HMRC value when I can access it on 10 May.

I ran the April payroll for another client today and the EA journals were posted correctly, so there must be something that went wrong in this instance.

We're on Advanced Payroll and I've ticked the Employment Allowance for 26/27 tax year, and also ticked Yes to include in the journal entries. This is not showing on the PAYE HMRC, it is stating we have not applied for the allowance?

It sounds like there is a disconnect between your internal settings and the actual communication sent to HMRC. While your Advanced Payroll settings are correctly calculating the allowance and creating journals, this data hasn't been pushed to HMRC yet.

To make the allowance official, you must submit an Employer Payment Summary (EPS) that specifically includes the claim flag. Your software may be waiting for the next scheduled pay run to send this, or it may require you to manually trigger an EPS for the 26/27 tax year to notify HMRC of your intent to claim.

Here's how:

1. Go to All apps, then Employees.
2. Click Reports.
3. Within HMRC REPORTING, select Employer payment summary (EPS).
4. Choose the tax year, then click Run report.
5. Hit Submit EPS and choose the relevant tax period.
6. You can check any boxes that apply:
   If no payments were made in the previous period, select No payments for period and choose the date.
   If there's been a period of no activity, select Period of inactivity and choose the date.
   If this is your final EPS for the tax year, select Final EPS for the tax year.
   If this is your final EPS because the business has ceased, select Final EPS because the PAYE scheme has ceased, and select the date the scheme ceased on.
7. Select Submit EPS again to finish.

Once you’ve sent that report and received an Accepted message, it usually takes a few working days for HMRC’s website to update. If your payroll journals are already showing the allowance as a credit, your software is working perfectly.

Please don't hesitate to use the Reply button if you have other concerns or questions.

I went back and submitted the EPS this is now showing on the PAYE. I am new to payroll and didn't realise I had to submit the EPS to claim the Employment Allowance.

This is all now sorted, 

Thank you for your help!