HMRC have published updated guidance for employers who need to submit an Earlier Year Update (EYU) which includes a negative amount of employee’s National Insurance (for example, where the amount of National Insurance deducted or reported is too high). When making the submission, the employer will need to set the ‘NIC refund indicator’ to ‘yes’ if a refund has been made to an employee or no refund was due (for example, if the amount reported was wrong, but the amount deducted was correct), and to ‘no’ if the employer still owes the employee a refund (for example, if the employee has left since the error was made).

Guidance on correcting payroll errors can be found on the website.