Incorrect RTI reported to HMRC by employer affecting UC claim

trebor424

My spouse was working for a company that reported incorrect RTI to HMRC. My spouse was paid £406 on 22 April and £744 on 30 April. Our UC assessment period runs from 24th month-23rd Month, so each payment fell within a different assessment period. However, the employer reported to HMRC that a payment of £1150 was made on 30 April, resulting in a nil UC award.

 The £406 should have been paid at the end of March, and we had to chase up the employer's payroll department on 5 occasions before they eventually paid, so as no earnings RTI had been reported by the employer for the period 24/3-23/4. We were asked to manually input the earnings of £406 on our UC account, which we did.

 So for the next assessment period,23/4-23/5, UC has used the £1150 figure as reported by the employer to HMRC, even though this is not what my spouse received on 30 April. We have provided UC with bank statements showing that the  salary payments were made on 2 separate dates. Initially, UC said they can't do anything unless the employer changes the earnings they reported to HMRC. We took this up with the employer, and they suggested we speak to HMRC. As I'm sure you are all aware, even getting through to HMRC on the phone is difficult, let alone them being helpful. 
My spouse has left the employer in question and as previously mentioned she had a bad experience of dealing with the payroll department, and don't think they'll help out in getting the correct figure reported to HMRC.

We have asked UC to review the award for the 1 June statement, but all they've said is "Your earnings dispute for the assessment period 24 April to 23 May 2024 has now been resolved and the £406.66 deduction is a type of deduction that cannot be disregarded for UC purposes.

Surely this can't be right, it's not fair, it's not our fault the employer reported an incorrect earnings figure, and we have provided bank statements as evidence. Has anyone had a similar experience, should we ask for mandatory reconsideration or are we stuffed?

 Any advice would be appreciated, thanks.

HillStreetBlues

trebor424 said:

My spouse was working for a company that reported incorrect RTI to HMRC. My spouse was paid £406 on 22 April and £744 on 30 April. Our UC assessment period runs from 24th month-23rd Month, so each payment fell within a different assessment period. However, the employer reported to HMRC that a payment of £1150 was made on 30 April, resulting in a nil UC award.

 The £406 should have been paid at the end of March, and we had to chase up the employer's payroll department on 5 occasions before they eventually paid, so as no earnings RTI had been reported by the employer for the period 24/3-23/4. We were asked to manually input the earnings of £406 on our UC account, which we did.

 So for the next assessment period,23/4-23/5, UC has used the £1150 figure as reported by the employer to HMRC, even though this is not what my spouse received on 30 April. We have provided UC with bank statements showing that the  salary payments were made on 2 separate dates. Initially, UC said they can't do anything unless the employer changes the earnings they reported to HMRC. We took this up with the employer, and they suggested we speak to HMRC. As I'm sure you are all aware, even getting through to HMRC on the phone is difficult, let alone them being helpful. 
My spouse has left the employer in question and as previously mentioned she had a bad experience of dealing with the payroll department, and don't think they'll help out in getting the correct figure reported to HMRC.

We have asked UC to review the award for the 1 June statement, but all they've said is "Your earnings dispute for the assessment period 24 April to 23 May 2024 has now been resolved and the £406.66 deduction is a type of deduction that cannot be disregarded for UC purposes.

Surely this can't be right, it's not fair, it's not our fault the employer reported an incorrect earnings figure, and we have provided bank statements as evidence. Has anyone had a similar experience, should we ask for mandatory reconsideration or are we stuffed?

 Any advice would be appreciated, thanks.

Have you asked for a mandatory reconsideration?

8dayweek

It sounds like the employer didn’t process payroll at the end of March - so the payment you received was effectively an advance of Wages (which UC don’t take into account) and then on the actual next payroll date they paid Wages less the advance of wages taken off via a third party deduction. 

Your argument should be the self reported Wages for period 24/3 - 23/4 need to be invalidated as they’re effectively being counted twice.  

Essentially your Wife wasn’t paid any Wages in that AP, she just had an Advance of Wages or “loan” from her Employer which doesn’t need to be declared. 

Yamor

I disagree. An employer not running payroll correctly does not convert the wages to an advance.

To the OP: you should definitely chase it up with UC. They will probably tell you first to request from your employer to correct their payroll submissions, but either way, you should easily win on MR/appeal.

[Deleted User]

I had something like this happen to me, I left a company and they paid me my last weeks wages 6 weeks later so I got no uc for 2 months

poppy12345

[Deleted User] said:

I had something like this happen to me, I left a company and they paid me my last weeks wages 6 weeks later so I got no uc for 2 months

That was different. UC entitlement is based on earnings received during your assessment period. Usually when claiming UC for the first time, it's advised to claim after you receive your final earnings. 

8dayweek

Yamor said:

I disagree. An employer not running payroll correctly does not convert the wages to an advance.

To the OP: you should definitely chase it up with UC. They will probably tell you first to request from your employer to correct their payroll submissions, but either way, you should easily win on MR/appeal.

I get this entirely - but the employer has already effectively said they won’t correct twice (once to OP when they fobbed them off to HMRC and also to DWP - as HMRC would have contacted them as part of the RTI dispute). 

Bank Statements don’t mean much. Wage Slips would be what you need. 

If the Employer issued a Wage slip for what they paid on 22/4, then great - cut and dried and MR will have the details invalidated and corrected. 

If there’s no Wage Slip for 22/4 then I highly suspect it was an off payroll advance and instead the Wage Slip for 30/4 has all the wages rolled up together and the “advance” deducted as a third party deduction. 

I get what you’re saying about cocking up payroll does not mean it’s an advance - but if payroll was missed for whatever reason then time can’t be turned back so most Employers will take this route rather than processing one lot of Wages out of cycle. 

Yamor

I agree that most employers will simply add it to the next payroll payment for administrative ease.

However, if an employee had a clear contractual right to be paid earlier (31 March in this case), and was in fact paid earlier (22 April in this case), then although the payslip appears to show they were only paid on 30 April, that wouldn't be determinative.

Unfortunately, UC DMs often think that the payroll has to be amended before they can revise a decision, but that is legally wrong. See the UC Regs, Reg 61(3).

I would be pretty confident that the OP would eventually win in this case. If not at MR, then at least when DWP are preparing their response to the appeal, I would hope they would concede. Of course, failing that, they should certainly win at the actual appeal.

JonVarnas

This happened to me last year and it took me 3-4 weeks to sort out - with pestering, of course.

Essentially, my former employer told HMRC that they had payed me more than they actually had, most likely for their own administrative reasons. As soon as I found this out in my UC statement I immediately raised an RTI dispute with Universal Credit, both via the juornal and more importantly by phone, because journal message are often ignored and this was a matter of emergency. The procedure was that

1. The DWP contacted HMRC
2. Then HMRC contacted my former employer, who duly ignored them
3. Then HMRC contacted DWP telling them that the employer didn't respond and there was nothing they would do.

This faff took about 2-3 weeks, but then someone from the DWP phoned me and we went through why the info was wrong and she agreed. The next day they notified me that they would reverse the original decision and would pay me what I was owed, and I got paid about a week later.  Back in the day I could've walked into my jobcentre and get it sorted out there and then but that's the way it is nowadays. 

Just get that RTI going and pester them and you should get what you're owed.

xxxxxxxx

You did not say if you have contacted HMRC to open an RTI dispute. 

Does she have payslips showing the correct amounts and dates?

If UC allowed you to remove the £406.66 from March/April and left it as £1150 for April/May would that be ok with you? i.e. do you have a work allowance which would make it not ok?  Otherwise this would seem to be the easiest solution.

Hoenir

trebor424 said:

 However, the employer reported to HMRC that a payment of £1150 was made on 30 April, 

 The £406 should have been paid at the end of March, and we had to chase up the employer's payroll department on 5 occasions before they eventually paid,

Sounds as if the payroll is run and processed monthly. The RTI therefore likewise is monthly. Was the correction for March treated as an advance. With just one payslip being produced.