Entering Payee Tax Credits

This chapter provides an overview of tax credits and discusses how to:

Enter tax credit information.
Override tax credit amounts.

Understanding Tax Credits

This section discusses:

Tax credit processing.
Delivered tax credit earnings.
Viewing delivered elements.

Tax Credit Processing

Beginning in April 2000, employers who operate a PAYE scheme have to pay eligible employees tax credits through the payroll; that is, employers must include tax credit with pay at the end of each pay period. The Inland Revenue informs the employer if an employee is eligible for tax credits. For example, if employees are paid on a weekly basis, their tax credits are also paid weekly, together with their earnings. The Inland Revenue tells employers when they should start paying tax credits, how much to pay, and when to stop.

Global Payroll for the U.K. meets the Inland Revenue’s requirements for processing tax credits. Use it to:

Calculate the tax credits for the pay period from a daily date and pay them through the payroll.
Display the tax credit amount to be paid on an employee’s payslip.
Record the total tax credits paid in a tax year.
Record tax credits on the P14 and P60 reports.

Delivered Tax Credit Earnings

Global Payroll for the U.K. delivers these earnings for tax credits:

TC ER TXCRD1

This is the tax credit payment earning. It is paid per pay period and is accumulated over the tax year.
TC ER OVRD

This element is used for overriding the normal tax credit amount for one pay period. It is entered using positive input. However, the tax credit is actually paid using the normal earning TC ER TXCRD1 and you do not see the earning TC ER OVRD in the payroll results.

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for the United Kingdom. Instructions for running the query are provided in PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

Entering Tax Credit Information

This section discusses how to record employee tax credit information.

Pages Used to Enter Tax Credit Information

Page Name	Object Name	Navigation	Usage
Maintain Tax Credits	GPGB_EE_TAXCRD	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Credits GBR, Maintain Tax Credits	Record tax credit information for an employee.

Recording Employee Tax Credit Information

Access the Maintain Tax Credits page.

Tax Credits

Enter the tax credit data that applies to a payee.

Note. Only one tax credit can be running at any time. If an employee has more than one tax credit in a pay period (this is possible if a new tax credit is awarded for an employee with a change of daily rate, for example), make sure that the start dates and end dates do not overlap. In the unlikely event that an employee has more than three tax credits, you can enter more than three in the system, but the system processes and pays only three tax credits in any one pay period.

Start Date	Enter the date from which you must start paying tax credit to an employee. The Inland Revenue sends you a start notification by post, giving you either 14 (for weekly paid employees) or 42 days’ notice (for all other employees).
Stop Date	Enter the date when your responsibility for paying tax credits to an employee ends. The Inland Revenue notifies you of the date when they want payment to end.
Tax Credit Daily Rate	Enter the daily amount that applies to each calendar day for which you must pay tax credit. The Inland Revenue notifies you of this amount.
Tax Credit Reference	Enter any reference that the Inland Revenue uses for the employee’s tax credits.

Stopping Tax Credit Payments

When you receive notification from the Inland Revenue to stop paying tax credits to an employee, you must stop paying tax credit as instructed. Also, if an employee leaves your organisation, you do not have to pay tax credit from the last day of employment. Global Payroll for the U.K. automatically takes this change into consideration and stops paying tax credits accordingly.

Note. If you want to stop paying tax credit to an employee who is involved in a trade dispute, for example, or because an employee is leaving within three months, you must manually stop the payment in the system. Global Payroll for the U.K. does not calculate this automatically.

You must show the tax credit paid on the employee’s payslip, as well as record the total tax credits paid in a tax year for an employee on the P14 and P60 reports.

Overriding Tax Credit Amounts

If you need to override the normal tax credit amount defined on the Maintain Tax Credit page, create a positive input entry for the payee. This section discusses how to enter positive input for tax credits.

Page Used to Override Tax Credits

Page Name	Object Name	Navigation	Usage
Positive Input	GP_PI_MNL_ERNDED	Global Payroll & Absence Mgmt, Payee Data, Assign Earnings and Deductions, One Time (Positive Input), Positive Input	Create the positive input entry for a payee for a selected pay period.

Entering Positive Input for Tax Credits

Access the Positive Input page.

To create a positive input for the selected payee:

Complete the fields on the Action tab as follows:

Entry Type

Select Earnings.

Element Name

Select the tax credit override earning TC ER TXCRD1.

Action Type

Select Override.

Complete the fields on the Main Components tab as follows:

Amount	Enter the total tax credit amount for the pay period. The positive input entry overrides all tax credits for the payee. Therefore, if the payee has multiple tax credits, the amount entered here must include all tax credits for the pay period.
Currency	Select GBP.

Note. Using positive input you can process tax credit overrides for any employee. Therefore, you must ensure that you create positive input entries for the correct employees.

Note. Use positive input for one-time changes to tax credits only. To process tax credits in each pay period, define them on the Maintain Tax Credits page.

Positive input is discussed in detail in the PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

Entry Type	Select Earnings.
Element Name	Select the tax credit override earning TC ER TXCRD1.
Action Type	Select Override.