The new NI number prefix is causing chaos for payroll departments BUT you can avoid these problems
HMRC have introduced ‘KC’ as a prefix for NI Numbers (i.e. KC123456A) however, they did not communicate this correctly to software providers causing FPS (full payment submissions) to fail.
Unfortunately software providers cannot just change the allowance of this NI prefix until HMRC send their developers the fix as it would cause them to lose HMRC accreditation.
HMRC has confirmed that from 15 November 2016, customers will be able to submit Real Time information (RTI) data for employees with National Insurance numbers with the prefix ‘KC’.
However, some software products including HMRC’s Basic PAYE Tools, will not be updated before April 2017. Until this problem is rectified, you should adopt the following plan of action.
For any new starter with an NI number that starts with KC:
- Set up your new starters, but leave the NI number blank in the payroll software or the FPS will fail causing non filing issues.
- Keep a copy of the employee details in the client file, with a note that the NI number needs to be entered once the fix is in place.
If you have any questions relating to payroll or would like to further discuss how we could help you, please contact us on 024 7651 8555 / 0121 711 2468.