If set up in the HMRC portal, you can set up automatic updates, such as tax code changes, student loan notices, and year-to-date information in Paycircle. To do so, follow the steps below.
As a Paycircle administrator, click Settings, then click Payroll settings.
Navigate to References and updates, then next to Electronic updates, click Edit.
Select whether you want to enable electronic updates.
đNote: You need to ensure you've enabled electronic updates, also known as Electronic Data Interchange (EDI), in your HMRC account.
Enter your HMRC User ID and HMRC Password.
Turn on the electronic updates toggle.
đNote: By enabling these, you've set up daily checks for tax code updates with HMRC, usually around 1 am. You can also do them on demand.
If you turn on auto-accept, you don't need to accept them, and the change is immediate.
If you don't enable it, you need to accept or reject the updates.
Automatic update behaviours
Paycircle applies tax coding notices and year-to-date (YTD) figures automatically in most situations, but the behaviour changes depending on the state of the payroll at the time the notice is received. The scenarios below explain what happens in each case.
P6 with YTDs applies automatically before payroll is calculated
When a P6 notice that includes YTD figures is received and the payroll period has not been calculated, Paycircle applies the tax code change and YTD values immediately. No manual action is required.
P6 with YTDs is deferred when payroll is calculated
If the payroll period has already been calculated when a P6 with YTDs is received, the notice is held as pending, and the YTD figures are not applied automatically. An alert will appear to let you know that tax updates are pending.
To apply the update:
Undo the payroll calculation to unlock the period.
Select Get tax updates.
This applies any outstanding notices, including the deferred P6 with YTDs.
If you do not want to apply the update in the current period, you can leave it as pending. It will auto-apply at the start of the next period.
New starter receives P6 before first payment
If HMRC issues a P6 notice for a new starter before their first payment is made, Paycircle applies the tax code from the P6 when the notice is received. The new starter's first payslip will use the tax code from the P6 rather than the default starter declaration code.
Prior-year YTDs are not applied at the start of the new tax year
đ¤Tip: Review any pending notices before running the final period of the tax year to ensure tax calculations are correct.
If a P6 notice with YTDs was pending at the end of the tax year, for example, it had not yet been applied before the year rolled over, the YTD figures from that notice are not carried forward or applied at the start of the new tax year. The tax code update itself will still be applied, but the prior-year YTD values are discarded.