Payroll software not accepting your KC code?

Aug22

Posted in News

Income Tax Uk

Why the latest NI prefix is causing a spot of bother, and what you can do about it.

If, like us, you spend more time than is healthy scanning the pages of the HMRC website, you may have noticed the following recent update:

“HMRC are aware that a small number of National Insurance numbers with prefix ‘KC’ were issued recently and that these are causing some problems for our customers.”

KC, as every payroll processor knows all too well, is the latest prefix issued by HMRC to take account of the fact that NINOs (National Insurance numbers) are running out. The only fly in the ointment is that whilst HMRC has added KC to its list of valid NI prefixes, no one told the software developers. As a result, a legitimate code is being rejected by payroll processing software.

There is a rather Heath Robinson workaround to this. So if you are trying to force a KC code through payroll software that stubbornly refuses to accept it, try this:

  • Leave the NI number field blank
  • Ensure the employee’s address field is completed
  • if you/your employee has a ‘KC’ National Insurance number, they don’t need to request a new one

This is only a temporary fix, and the KC codes will have to be placed on the system at some point. As HMRC notes, “We are working hard to resolve this issue quickly and will provide more information shortly.” As will we.

Struggling with payroll problems? Talk to us here.