PAYE12030 - Coding: coding deductions and expenses: automatic process to update codes for expenses
There is a batch process (Bulk Expenses Changes) available to amend codes when you agree EXP or FRE are due to a large number of employees of the same employer, possibly for earlier years as well as for CY.
The process is initiated at the Data Centre from a tape provided by the employer. The Data Centre will run the tape against the database, amend the individual’s records and issue amended notices of coding.
The process depends on a considerable amount of employer participation so, if you decide you want to use it, you will need to involve the employer at an early stage. To use the process, the employer must first have enrolled to receive Annual and Budget code changes by magnetic media.
Codes for CY+1 cannot be updated so the function will not be available from the date of the Annual Coding Main Review in early January until the following 6 April.
Who can use the process
An employer can use the facility if the total number of employees whose codes are to be amended is 50 or more. You and the employer will need to weigh up the advantages and disadvantages in deciding whether or not it is worthwhile. The main benefit to the employer is the facility to receive amended notices by magnetic media rather than individual forms P6.
If you want to use the process for less than 50 employees, contact Personal Tax Product & Process (PT P & P), Shipley, as it may be possible to schedule a run with one for a larger employer.
When the process will run
Bulk Expenses Changes is not run on fixed dates or at fixed intervals. It must be fitted in with other batch processes as the operating schedule permits. You should therefore contact PT P & P, Shipley at an early stage.
Data required from the employer
A technical specification booklet, VC1 - Expenses Uprating Specification, is available from PT P & P, Shipley.
Once you have decided you would like to use the process, obtain a copy of this booklet. An employer will need to see it before deciding whether or not they can agree to provide the necessary data.
An employer must also be able to determine the date from which each employee was entitled to the relief.
Initial action in your office
PAYE12031 tells you the action you need to take to make the arrangements.
Action by employer
The employer will need to
- Calculate the total Earlier Years Adjustment (EYA) due to each employee based on the length of time for which there was entitlement to the relief
- Submit a magnetic tape to the Data Centre showing the necessary data in the correct format. There will be a 20 character space at the end of the tape for additional information such as works numbers. The process will not use this information, but you may want to ask the employer to supply it to help you deal with subsequent enquiries
- Provide a paper copy of the tape, to assist you in answering any queries you receive
Note: Make sure you get this paper copy before the tape runs at the Data Centre and look at it for obvious errors, such as FRE used instead of EXP or vice versa, or trailing zeros instead of leading zeros.
What will happen next
- The tape will run against the database and entries will be made in the CY coding record of the agreed amounts of EXP / FRE and EYA, overwriting any amounts already there
- Forms P2 and P6 (or whatever medium your employer uses) will be issued. The forms P2 will carry the following centrally generated message
- RLS forms P2 will be sent to the your office for action
- For this coding amendment, the Code Details area will display ‘Automatic Code Change’ beside the date the form P2 was issued
SA cases
Further advice is given in the SA Manual on what to do when capturing returns where EYA is in the coding, see ‘Earlier years adjustment (EYA) in code’ at SAM121660.
