PAYE13110 - coding: coding: general principles: removal of COP cases from SA - automatic coding
When a CY-1 tax return is captured the SA computer system
will identify COP / SA cases suitable for automatic removal from
SA. It will do this by comparing the CY-1 return with a set of
specified criteria. Further information can be found in the Self
Assessment Manual in section 'Maintain Taxpayer Record' in the
'Records' business area.
COP will look at the coding items from the taxpayer’s
SA record and for CY+1 where an entry is present for the same
source, no change will be made. If there is no entry in CY+1, COP
will look at the CY coding record. Where an entry is present no
change will be made. The computer system assumes that a clerical
review has taken place, for example because the source ceased in
CY, no entry appears in CY+1.
Where there is no entry present in CY+1 or CY, the amount
from the taxpayer’s SA record will be included in the coding
record for CY+1. Where there is no entry present for EXP or PSUB in
CY+1 or CY then EMO will be produced for a clerical review. Where
relief for a payment is given for extending the basis rate band,
for example PPR, the SA computer system will check that higher rate
liability occurs on an amount equal or more than the payment made.
If not, the SA computer system will provide the amount by which the
basic rate is extended, rather than the total payment.
As a result of the automatic removal from SA there may be an
increase of enquiries after the Annual Coding run has taken place.
This may be because of items included in the CY+1 code for the
first time for example
- Reliefs due to give higher rate relief
- Adjustments to recover the additional tax on savings income
The table below gives further information on specific income and payments from the SA tax return
| Untaxed Interest (Boxes 10.1 and 10.8) | INT included in CY+1 code. For a basic rate taxpayer the amount will be 20/22 of the total untaxed interest |
| Taxed Interest and Dividends (Boxes 10.4, 10.7, 10.11, 10.14, 10.17, 10.20, 10.23 & 10.26) | Gross amount from all
boxes added together, but where the taxpayer is not liable or is
liable at the starting rate or basic rate, no amount will be sent
to COP.
HRA included in the CY+1 code for taxpayer liable at higher rate |
| Other Taxable Income (Box 13.3) | If no tax has been deducted, there is no entry in box 13.2, the SA computer system will add the amount in box 13.3 to any amount in box 1.10 of the employment page. COP will look for coding entries described as COMM, DEI, OE or PTE. Only if none of these are present will DEI be included in CY+1 |
| Retirement Annuity Relief (Box 14.1) | RAR included in CY+1.
Many taxpayers confuse RAR and PPR payments so COP will first look for RAR in CY+1 and CY and if not present will look for PPR in CY+1 and CY. Only where neither is present in the code will RAR be coded in CY+1 |
| Personal Pension Relief
(Boxes 14.6 & 14.11)
| PPR included in CY+1 for higher rate taxpayer at the source against which the code is operated |
| Other Contributions (Box 14.10) | Payments shown here may
not be regular or continuing so details will not be passed to COP
|
| Gifts to Charity (Box 15A) | CHR included in CY+1 for
higher rate taxpayer at the source against which the code is
operated.
Amount will be box 15A.1 less ‘one-off’ gift in 15A.2 |
| Tips (Employment page box 1.9) | TIPS included in CY+1 from maximum of two employment pages |
| Other Payments
(Employment page box 1.10)
| DEI included in CY+1 from maximum of two employment pages. Total of box 1.10 plus amount in box 13.3 (see Other Taxable income (Box 13.3) above) |
| Professional Fees and Subscriptions (Employment page box 1.34) | PSUB - where no entry in CY+1 or CY clerical review required |
| Other Expenses and Capital Allowances (Employment page box 1.35) | EXP - where no entry in CY+1 or CY clerical review required |
Early Morning Output (EMO) will be produced where COP is
unable to deal with the information provided by SA because the
- COP record cannot be found
- UTR does not match
- Record found is not a GCD record
- Code is BR, 0T, D0, FT or NT
In these circumstances the COP record needs to be updated
clerically.
Automatic coding will only apply in the circumstances
described above. Where the taxpayer objects to a non-PAYE source of
income (for example INT or HRA) included in the PAYE code, refer
them to the letter SA251 (letter sent to taxpayer advising removal
from SA). Explain that coding will recover the extra tax due if we
do not send an SA tax return. If the income is removed from the
code then we will need to send SA tax returns each year.
If the taxpayer prefers to complete SA tax returns, you will
need to reactivate the SA record, set the ‘Automatic Closure
Inhibited’ signal on SA and review the coding and signals on
COP.
