Headache Cure

Electronic filing of end-of-year information is the biggest change to payroll in 50 years. So how are Payroll World readers adjusting? Linda Pullan reports as a major cancer charity met the challenge of the electronic P14

Overlooking the River Thames, next door to MI5 headquarters in Vauxhall, central London, lie the offices of Marie Curie Cancer Care. It is early in May 2005 and payroll manager Sarita Darch and her deputy Sharon Dunne are preparing to send their annual end-of-year forms via electronic media.

The switch to e-filing marks the biggest change in payroll operations in half a century. Pay As You Earn began in the 1940s, while the first payroll mainframes appeared a decade later. Now in the 21st Century it is adios to the paper year-end forms. There has been much emphasis, in this journal and elsewhere, that this implies an organisational shift as well as modern technology. So, how does the transition work in practice? The Marie Curie central payroll team is based in London, though there are other payroll staff scattered around the country operating a number of payrolls paying a variety of staff including of course the Marie Curie nurses. It is not a simple payroll: there are NHS nurses working under contract for the charity, producing plenty of complexities for Ms Darch and her team.

Although there are several different payrolls, they are all registered under one tax reference number, producing between 6,000 to 7,000 P14s at year-end on their own in-house payroll package, which has been tailored to cope with the complexities of their payrolls.



EDI selected
Marie Curie has opted for Electronic Data Interchange (EDI) as its preferred method for submitting year-end returns and will eventually be receiving its in-year changes as well via this route. For a number of reasons, the installation of EDI was delayed until mid February, in fact Valentine's Day. Ms Darch and her team were worried - it was a little late.

Thankfully, the whole project from the installation of the ISDN line and the software, the works number update and testing the EDI submission only took two and half months from start to finish. Often the biggest obstacle to overcome is waiting for the ISDN line to be installed, which can take weeks, a factor that many employers had not anticipated.

Marie Curie decided to opt for ODEX software for the operation of EDI using generic flat files (GFF). Ms Darch comments that: ' we chose ODEX because this is the software that the Revenue themselves use and we felt that it would make the operation much smoother'.

'The suppliers of ODEX came in for a day to install the software, onto one machine which is displayed on the desktop as five icons and spent most of the time with our IT staff,' says Ms Dunne. 'We were told simply to drop the files we wanted to send into the EDI folders and that there was nothing else to worry about. This is perfectly true unless of course something goes wrong. Some troubleshooter notes would have been useful, although the supplier does provide help desk support. We simply email any problems to the help desk; they then call us and ask us to check various files'.

She adds: 'Although we were told not shut down the PC with the EDI software on it, we did find that if any of the files we want to send get stuck in the outbox, shutting down the machine and restarting it, seemed to kick start the outbox'. Another thing she learned was that the cable icon shows both B channels are down, which might cause a user to panic, but that doesn't mean anything is wrong, the cables are down when no information is being sent.

Due to the size of the payroll and the turnover of staff on the payroll, the payroll team felt that the key to a successful year-end was a lot of pre tax-year-end preparation. This began with a payroll data cleanse and a Works Number Update (WNU) which were done at the same time.



Revenue helpful
Sarita Darch adds: 'I must say that we found the Revenue very helpful when we decided to do our payroll cleanse. We were given a contact name for the NI cleanse and he gave us everything we needed including a booklet explaining how the process worked. We had the option to send the information to the Revenue by email, disk or letter.

'We thought that it may bring up lots of queries but it didn't. The Revenue confirmed all the corrections and changes they had made on a paper report. We could have had the information downloaded into other formats but we had no problem manually updating the information'.

Results from the cleanse were:

• 6,297 records submitted
• 313 NINO traced/corrected by the Revenue
• 70 NINO could not be traced
• 457 addresses were corrected
• 305 name changes made

Before EDI can go live, users have to undertake a number of test transmissions. Ms Darch says: 'We were very impressed with the Electronic Business Unit (EBU), who were very good. During the testing process, our contact was in constant touch to see if we had any problems or needed any help.

'Once testing is complete, users are switched to a live account manager. The only difficulty we experienced here was that our live account manager was sometimes attending meetings at critical times leading up to the deadline and there was no one else to cover his accounts in his absence.'

Collating the information for transmission took minutes to transfer into one file. From there the user moves the data into an EDI transmission file. The sent files are then shown in an archive folder so that the user can keep track of the files that have been sent. Once the file has been sent, the user is notified by ODEX via email. Further confirmation is sent from the Revenue within 24 hours.

Sometimes the Revenue's confirmation has been sent to the wrong email address, which has caused delays. The Revenue reminded users that the P14s and P35 should be sent as separate messages on EDI, with the P35 as the final message once all the files had been accepted.

One of the initial problems that Marie Curie's payroll team encountered was during a transmission when the Revenue could not see the connection at their end and insisted that the problem was at the user's end. Strangely on one occasion later the same day after being told there was no connection, the user received 15 acknowledgement reports confirming the test transmission was fine.

As Marie Curie had been convinced that the connection problems were at their end they paid for BT and the ODEX software suppliers to come in and check the software and ISDN line. They then found that the problem was if the Revenue's Electronic Business Exchange (EBX) was busy, after ODEX had tried seven times to dial in, it simply timed out.

The Revenue had stated that any rejections of electronic files would be clearly explained in plain English, so did they keep their promise? Sarita Darch says: 'Yes, the files we received from the Revenue gave us the date and time it was process, a unique ID number and confirmed if the file had been accepted or rejected. The report confirmed if it was a live or test report and the tax reference number.

'We had a few rejections but not many. The rejections were listed as date of birth not in a valid format; NINO invalid for example a temporary NINO; and if the earnings were not at least the LEL under category A, they were rejected and had to be changed at year end to category X.

Her final observation is: 'We have been very pleased with the overall ease and success of year end and we know that we made the right choice with EDI over the internet'.