How to correct underpayment or overpayment to HMRC

Typically, payments made to HMRC should match the payment due to HMRC. If however, you have previously either underpaid or overpaid HMRC, and your HMRC account is either in credit or debit as a result, this help guide article explains how you can adjust and correct for this.

HMRC underpayment

Where underpayment occurs, the amount owing to HMRC can be corrected for by following these steps:

• Within the purchasing module, selecting the 'Invoice to Pay' option

• Within the Invoice to Pay screen, enter the details of the amount that is owing to HMRC, and upload the documentation relating to the underpayment as the invoice file.

This purchase will then go through the usual finance process flow - receipt check, approval, payment, and bank reconciliation.

HMRC overpayment

Where an overpayment to HMRC occurs, here are the steps that are needed for deducting the overpayment from your next payment to HMRC, and then reconciling this transaction.

• If you are using the Payroll Upload module, HMRC payments are automatically generated from the uploaded data; therefore, you will need to follow the steps in this help article below to adjust for the previous overpayment.
• If you are not using the Payroll Upload module within ExpensePlus, you can simply adjust for this overpayment by deducting it from the amount of your next payment to HMRC (there is no need to continue reading this support article).

Adjusting for HMRC overpayments (when using Payroll Upload)

Paying HMRC

When making your next payroll payment to HMRC, within your bank account, set up a payment for the net amount due to HMRC (rather than the amount showing on the payment screen).

Example: whilst the payment amount to HMRC is displayed on the payment screen as £2500, if your HMRC account is in credit by £500:

• Setup a payment within your online banking to HMRC for £2000 (£500 less, to account for the credit amount)
• Mark the payment for £2500 as paid

Splitting the bank transaction

When the bank transaction is uploaded to ExpensePlus, within the match transactions screen, you won't be able to match it (because the amount of the bank transaction on the left-hand table and the payment on the right-hand table won't match).

Before you can match the bank transaction, you will first need to split the transaction.

1. Within the View Statement screen, click the edit button ('pencil' icon) to the right of the bank statement transaction

2. In the Split Account Transaction screen, split the transaction into two:

• Paid Out Transaction, for the amount that should have been paid (£2,500)
• Paid In Transaction for the difference between what you should have paid and what was actually paid (£500)

Then select 'Confirm'.

Reconcile transactions

Then, within the Match Transactions screen:

1. Reconcile the paid out transaction on the left-hand table to the corresponding payment on the right-hand table

2. Reconcile the paid-in transaction on the left-hand table by clicking on this transaction

Then in the pop-up that appears, select the 'Supplier Refund' option, and enter the relevant details.

To help you better understand the Payroll module, please visit the module overview page.