If you set up Sage 50 Payroll part-way through the tax year, you need to ensure your tax and national insurance (NI) calculations are accurate. To do this, you must enter Employee year to date values for your employees.

However, your software doesn't include YTD values you enter manually for directors in your full payment submission (FPS). To ensure HMRC receive the correct information, process directors from the start of the tax year. This applies even if their pay hasn't exceeded the thresholds for tax and NI.

Also, take account of the director's RTI ID. Find out below why this is important, and how to do it.

The RTI Payroll ID is a series of letters and numbers that HMRC's systems use to identify an employment. Normally, this doesn't change once it's set. HMRC uses it to identify when an employee has moved jobs or has a second job.

When you set Sage 50 Payroll up mid-year, set directors up with the same RTI ID as the previous payroll software. This avoids HMRC thinking the employee has a new or second job.

Enter the RTI ID

Use the original RTI ID that the prior employer used. Contact HMRC or the previous employer to obtain this.

NOTE: You can only amend the RTI ID field when you first create an employee's record. Once you've saved and created an employee's record, you can't amend it.

1. Click Employee, then Quick Employee and enter the director's details.
2. Next to RTI Payroll ID, click Edit.
3. Enter their original RTI Payroll ID.
4. Click the Old Payroll ID drop-down and select As above, then click OK.
5. If there's more than one director, repeat Steps 1 to 4 until you've set them all up.
6. Reprocess the director's payroll for each period and submit a dummy fps for the last period HMRC received any liability values.
7. Process the payroll for the next period and submit a live FPS as normal.

I've already entered YTDs

If you've already processed a director after manually entering their YTD values, you need to correct this.

To find out more, visit the known issue: manually entered NI year to dates for directors not included in FPS guide.