Well there could be numerous reason for an RTI submission failing, but HMRC has highlighted an issue with some recently issued National Insurance numbers.
The importance of a valid National Insurance number
There is a database of valid National Insurance number prefixes, and certain prefixes such as GB or ZZ will not be allocated. There are also rules such as the first letter should not be a Q, and the second letter should not be an O.
If you submit an RTI file with an invalid National Insurance number the file will be rejected. The format is two letters, followed by six digits, then a final letter.
Sometimes HMRC will issue a temporary reference that is not a National Insurance number, this will not be in the correct format and cannot be used in its place. HMRC will still sometimes refer to the temporary reference as a National Insurance number, but this is misleading.
Most software has built in validation to check if a National Insurance number is valid before it is submitted, so the error should be detected before the RTI submission is rejected by HMRC.
It is also possible to use HMRC basic tools to verify a National Insurance number, but this is not straightforward.
We will validate all National Insurance numbers before applying them to an employee as part of our normal process.
The Current Issue – KC prefixes
National Insurance numbers have recently been issued with the prefix KC, but HMRC will not currently accept these as valid. Most software will reject the KC codes, but some people have reported that they have managed to enter the number, but when they tried to submit the RTI files the whole file was rejected.
So if you have had issues with RTI submissions it would be worthwhile a quick check that it is not an invalid National Insurance number causing the problem.
The current Solution
HMRC have issued the following advice:
- the National Insurance number field should be left blank
- you should make sure the employee address field is completed in those cases
- if you/your employee has a ‘KC’ National Insurance number, they don’t need to request a new one
HMRC are working on this issue and hope to have everything resolved shortly. There is a link to the HMRC update page here.
If you have experienced issues and are considering outsourcing please contact us.