Yes, you can upgrade from NPPL(SEP) to JAR-FCL PPL with SEP rating.
Currently there is only one way and that is to top up all the NPPL training you did (which must have been with a JAR-FCL FI) by adding any extra dual, solo, cross-country time you need before taking the JAR-FCL PPL Skill Test. No further theoretical requirements - one reason why we agreed not to introduce the NPPL-specific exams we were considering.
I will be asking for another way to be introduced to allow those who obtained their NPPL(SEP) through licence allowances (e.g. by topping up SLMG, glider or microlight time) with further 'experience' requirements. These proposals are currently sub rosa.
The reason why some people would start with the NPPL and go on to the JAR-FCL PPL is primarily that of cost. It will take less flying time; all the basic training is the same for either licence and the NPPL navigation element is about the same as it used to be for the UK PPL. Many folk will be happy to build up their experience over a few years, then upgrade to JAR-FCL PPL. Then add the IMC Rating and/or night qualification, then maybe the multi Rating.
There is nothing stopping people doing most of their JAR-FCL PPL upgrade on a multi, if that's what they want and can afford, of course.