How To Fix 5G712 - Employee NI arrears from previous year remain at end of tax year

SAP Error Message - Details

• Message type: E = Error

• Message class: 5G - HR: Messages for Britain

• Message number: 712

• Message text: Employee NI arrears from previous year remain at end of tax year

What causes this issue?

Employee National Insurance arrears which originated in the previous tax
year remain at the end of the current tax year. These arrears can no
longer be claimed back from the employee.
Under current NI rules, employees can carry forward NI arrears to the
next tax year only once. If an employee's arrears are not fully deducted
by the end of the subsequent tax year, they cannot be carried forward
any further and become the liability of the employer.
See also
<DS:DE.P08_ARPRY>National Insurance Arrears</>

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message 5G712 - Employee NI arrears from previous year remain at end of tax year ?

  The SAP error message 5G712, which states "Employee NI arrears from previous year remain at end of tax year," typically relates to issues with National Insurance (NI) contributions in the UK payroll system. This error indicates that there are outstanding National Insurance arrears for an employee that have not been resolved by the end of the tax year.
  Cause:
  
  Unresolved Arrears: The employee has National Insurance arrears from the previous tax year that have not been cleared.
  Incorrect Payroll Configuration: There may be issues with how payroll is configured, leading to incorrect calculations of NI contributions.
  Data Entry Errors: Mistakes in entering payroll data, such as incorrect NI codes or contribution amounts.
  Timing Issues: If the payroll processing for the previous year was not completed correctly or on time, it could lead to outstanding arrears.
  
  Solution:
  
  Review Employee Records: Check the employee's payroll records for the previous tax year to identify any discrepancies or outstanding amounts.
  Clear Arrears: Process the necessary adjustments to clear the NI arrears. This may involve making additional payments or adjustments in the payroll system.
  Correct Payroll Configuration: Ensure that the payroll settings are correctly configured for NI contributions. This includes checking the NI category and ensuring that the correct rates are applied.
  Reprocess Payroll: If necessary, reprocess the payroll for the affected periods to ensure that all contributions are calculated correctly.
  Consult Documentation: Refer to SAP documentation or support resources for specific guidance on handling NI arrears and related payroll issues.
  Engage Payroll Specialists: If the issue persists, consider consulting with payroll specialists or SAP support to resolve complex issues.
  
  Related Information:
  
  National Insurance Contributions: Understanding how NI contributions work in the UK is essential for resolving this error. Familiarize yourself with the different classes of NI and how they apply to employees.
  SAP Payroll Configuration: Knowledge of SAP payroll configuration settings, especially those related to NI, can help prevent similar issues in the future.
  Tax Year End Procedures: Familiarize yourself with the procedures for closing out the tax year in SAP, as this can help ensure that all necessary adjustments are made in a timely manner.
  
  By addressing the underlying causes and following the appropriate steps, you should be able to resolve the error message 5G712 effectively.