PAYE Schemes – Protocol for requests to move, co-locate, and/or amalgamate

Contents

1. Overview

The Inland Revenue has the responsibility of deciding which of its Areas is to deal with which PAYE schemes.

In its exercise of this responsibility, the Inland Revenue will consider requests by employers for PAYE schemes to be:

  • moved to another Area
  • co-located in one Area and/or
  • amalgamated (where they are operated by the same legal entity).

This document tells employers:

  • the information we will need to make a decision on any request for a movement, co-location or amalgamation (section 2 and section 3 below)
  • the factors we will consider before making our decision (section 4 below) and
  • how to make their request (section 5 below).

This document also mentions the circumstances under which the Inland Revenue may need to initiate a movement of PAYE schemes (section 6 below).

2. Information needed - the PAYE schemes

To consider any request for change, we will need some basic information about the current position on all PAYE schemes operated by the employer(s) involved – including those operated by any other members of any group or other financial entity. (While we will already have some of this information, a comprehensive response covering the four points below for all the PAYE schemes will ensure that decisions are taken using accurate and up to date information.)

The information needed for each current PAYE scheme is:

  • name of the PAYE scheme
  • approximate number of employees, pensioners, etc. within that PAYE scheme
  • a brief description of the scheme such as “Head Office monthly paid employees” or “Pensioners of X Ltd (taken over)”
  • Inland Revenue Area and full Inland Revenue Employer reference number.

We will also need to know precisely what impact the proposed move, co-location or amalgamation would have on the current position:

  • which of these PAYE schemes would move, co-locate or amalgamate?
  • which Inland Revenue Area(s) would receive PAYE schemes?
  • what preference, if any, do you have about the timing of the change?

(Please note that it may not be possible for us to meet your preferences on timing and/or which Inland Revenue Area(s) would receive the PAYE schemes.)

3. Information needed – the business case for change

We will also need to know how the change proposed would benefit your business and/or the Inland Revenue. (The information in section 4 below may be helpful to you in considering the benefit to the Inland Revenue.)

We will consider any reasons you give but will be particularly interested in information about the extent to which:

  • you manage the PAYE schemes involved centrally
  • the employees of these PAYE schemes have similar terms and conditions of employment
  • benefits and expenses are common between the PAYE schemes involved
  • dispensations are, or could be, common between the PAYE schemes involved
  • the change proposed would help you do business electronically and
  • you expect the membership of the group or other financial entity to change in the foreseeable future.

Where the employers are not members of a group of companies or similar financial entity, this does not prevent you asking for a change but you will need to explain the connection between the employers and why the change will benefit all parties.

Any change is likely to mean some short term disruption and transition costs to both the employer(s) and the Inland Revenue and you will need to allow for this in deciding whether to ask for a change. For example, the PAYE schemes involved will be allocated new references and new payslips will be produced showing these references.

If you have a preference for a particular Area and/or any particular time scale, please explain the business case for these preferences.

There are some factors which we would not normally regard as strong business reasons for a change:

  • co-location with non-PAYE activities such as the Area office dealing with the Corporation Tax liability or Self-Assessment liability of the employer concerned
  • a preference for a particular Area office based on an actual or perceived difference of approach by that Area office
  • physical convenience - unless there is a particular reason why the alternative methods of communication available would not be sufficient.


4. The factors the Inland Revenue will consider

In making our decision about the request, we will consider:

  • the strength of the business case for change
  • the extent to which the change requested fits with our location strategy
  • the impact of the proposed change on the Inland Revenue Areas involved
  • whether the change proposed seems likely to have an adverse impact on our ability to conduct reviews of, or enquiries into, returns made to us by any person or organisation for any purpose.

We will consider the extent to which the change proposed would contribute to – or deviate from – our strategic aims for location of PAYE work. The issues to be addressed are:

  • would the change proposed move PAYE work into an Area that does not currently have PAYE work?
  • would the change proposed move PAYE work into/away from an Area where there are plans to restrict PAYE work?
  • would the change proposed move PAYE work into/away from an Area that deals with the PAYE for other, similar, businesses?
  • would the change proposed move specialist PAYE work into/away from a team that has expertise in this specialism?

Not all Inland Revenue Area offices can take on PAYE work. We have no PAYE work in our London Region; restrictions on PAYE work in some locations in the London periphery; and PAYE work for Scotland is concentrated in Centre 1 Area.

There may be difficulties in moving records between our Accounts Offices and these may impose an additional constraint.

Some Areas have expertise in particular types of business and some have specialist teams dealing with particular segments of our customer base. For example, we have specialist teams dealing with taxation of inward expatriate employees. We would not wish to move specialist work away from an office or team with relevant expertise.

When thinking about the effect on the Areas concerned, we will be considering:? how many PAYE schemes and employees would move from/to each Area involved

  • whether there are particular features of the schemes involved which add to, or reduce, the work we must do on them from what would normally be the case for schemes of a similar size
  • the consequential staff numbers
  • whether there is alternative work for staff released at each donating Area – or can we reduce staff at no cost
  • whether additional staff needed can be provided at each receiving Area – released from other duties or recruited
  • availability of space at each receiving Area for staff and files
  • to what extent the timing of the change can be fitted around local Area plans and other changes
  • the impact on our Information Technology systems

We are more likely to be able to accommodate changes which involve relatively small numbers of staff and have some flexibility around timing. This flexibility allows us to fit the change requested around other developments and to avoid specific periods. For example, we prefer not to make changes of responsibility for employers during the last six weeks of the tax year to reduce the risk of problems at the end of the year.

5. Requests for change

Employers seeking a PAYE scheme move, co-location and/or amalgamation should contact:

  • the Area Director (Service) for the Area currently responsible for the PAYE scheme, or
  • where more than one scheme and Area are involved, the Area Director (Service) of the most appropriate Area. (This may, for example, be an Area already co-ordinating some aspect of PAYE administration for the group or may be the Area with the largest PAYE scheme).

You should supply the information mentioned in section 2 and section 3 above and any other information you think may be helpful to us when we are considering your request along the lines mentioned at section 4.

The Area Director (Service) will need to consult colleagues and this may take a little while. Where changes involve large numbers of employees and many different Areas, we may deal with your request from one of our Regional Offices or from our Head Office. However, please continue to regard the Area Director (Service) as your point of contact until we tell you otherwise.

We will keep you informed regularly and let you know when we have been able to reach a decision. Where we can make the change you have requested, we will discuss the arrangements for the change with you – either by correspondence or at a meeting. If we think we may be unable to agree to your request in full, we will consider what changes we could make which might assist you and will discuss these with you – either by correspondence or at a meeting.

6. Changes initiated by the Inland Revenue

There will be occasions when the Inland Revenue itself will need to propose a change of responsibility for one or more PAYE schemes – moving work from one Area to another. These are likely to be caused by a continuing imbalance between the work of a particular Area and resources available locally to do that work. We will advise you about proposed changes and take account of any comments you wish to make before making a final decision.

There may be minor changes of tax office reference, address or telephone number which are due to reorganisations within Areas – and so not covered by this policy on changes between Areas. For example, our ongoing programme of tax office reorganisations is bringing together tax offices within an Area to help us to organise the work within the Area. If one of these reorganisations occurs in the tax office dealing with your PAYE scheme, there may be changes to PAYE references, tax office postal addresses and telephone numbers.

We may also initiate a change of responsibility for a PAYE scheme following a change of employer address.

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