Understanding Tax Credits

From April 2000 until March 31, 2006 employers who operated a PAYE scheme had to pay eligible employees tax credits through the payroll. HM Revenue and Customs (HMRC) informed the employer if an employee was eligible for tax credits, the amount to pay, and when to stop paying tax credits.

Global Payroll for the UK enabled you 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.

Global Payroll for the UK delivers these earnings for tax credits:

• TC ER TXCRD1

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

• TC ER OVRD

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

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 Global Payroll product documentation.