PAYE21021 - employer records: maintain employer record: cancelled one year only (COYO) up to 2007 (Action Guide)

To clear a year on an employer record cancelled one year only, follow steps 1 - 37 below. The Guide is presented as follows

Initial action	Steps 1 - 7
XP scheme types	Step 8
PSC schemes	Step 9
Updating the employer record	Step 10
EBS shows year not live	Steps 11 - 13
Employer record has moved	Steps 14 - 16
Year already cleared	Step 17
Large employer	Step 18
Tax credits (for years up to 2006)	Steps 19 - 24
Incentive appeals	Steps 25 - 26
Filed online indicator set	Step 27
Final review	Steps 28 - 36
Final Action	Step 37

For details of how to access any of the Employer Business Service functions use the [Index of Functions] button on the left of the screen

Initial action

Ensure that no return is appropriate

If you do not hold a return

Review the papers held
Consider whether a determination under Regulation 80 is appropriate

A check must be made to establish whether any payments have been allocated against the employer record for the year

Use Function VIEW BROCS Format 3 (Postings Summary) to identify any payments made by the employer / contractor in the tax year relating to the return

If payments are shown on BROCS - make a note of the amounts and the dates of payment, - go to step 3
If there are no payments shown on BROCS – go to step 7

Use Function VIEW BROCS Format 9 to check whether the Class 1A NIC signal is set

If the signal is set – go to step 7
If the signal is not set, telephone the employer / contractor immediately – go to step 4

Nil Return

If you have received a nil return

Ask the employer to explain why the amount was paid and not entered on the return

Ask the employer to explain why the amount was paid and they have told you that a return is not due

Use the information supplied by the employer to decide whether the payment has been allocated correctly or not

If the payment has been allocated incorrectly

Arrange for BROCS to remove the payment from that year and to reallocate this correctly. For more information see subject ‘Overpayments And Reallocations’ PAYE47075. - go to step 7

If the payment has been allocated correctly

Advise the employer that they must submit a complete return
If you hold a return go to step 6

Use Employer Notes to confirm that a return is due for the year and take no further action

Incomplete return

Send the return back to the employer / contractor requesting a complete return. For more information see the Action Guide ‘Checks Prior To Recording Receipt of A Return’ PAYE40016
Use Function VIEW BROCS to check whether the following are held on the employer record

The CLASS 1A NIC EMP

The TC EMPLOYER signal, for years up to 2005-06 is set. Satisfy yourself that the year can be cancelled one year only
If any signals are held you must follow the instructions in the Action Guide ‘Nil Returns 2005 Onwards’ PAYE43031 to process a nil return
If neither of the signals are set go to step 8

XP Scheme Types

For an XP scheme

Review the voucher record on CIS to ensure that the employer has not submitted any vouchers for that year
Check the entries on the 'Contractor Scheme Voucher Pursuit Details' screen
If any vouchers are displayed as 'Captured' the year cannot be COYO

Forward a copy of your findings to the relevant Debt Management Office for them to pursue the outstanding return

Go to step 10

PSC schemes

If you hold either return, with monetary amounts on them, this year cannot be COYO

If you hold a P35 with monetary amounts and you have

Confirmation that a CIS36 is not required

Use Function AMEND EMPLOYER TRADE AND SCHEME to update the scheme type to P as in Action Guide PAYE27034

‘Date Not Known’ - where you do not know the date you received the information

‘Date Not Applicable’ – where the update is being made from information not received from the employer.
Review and update the scheme type for subsequent years
Process the P35

If you hold a CIS36 with monetary amounts and you have

Confirmation that a P35 is not required

Use Function AMEND EMPLOYER TRADE AND SCHEME to update the scheme type to XP as in Action Guide PAYE27035
Review and update the scheme type for subsequent years
Process the CIS36

If you have evidence that both the P35 and CIS36 are not required, go to step 10.

Updating the employer record

Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS to clear the year cancelled one year only (COYO)

If there are no exceptions you will have successfully cleared the year ‘cancelled one year only’
If the year is not live go to step 11
If the employer record has moved go to step 14
If the year has already been cleared go to step 17
If the employer record relates to a large employer go to step 18
If an error message relating to tax credits is displayed go to step 19
If an error message relating to incentive appeals is displayed go to step 25

EBS shows year not live

If any of the following apply you will be unable to clear a year cancelled one year only

The employer record is cancelled
The start date is later than the year on the return
The employer record is dormant
The employer record is ceased

Review the papers and check that the correct year was entered
If the correct year was not entered

Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to update the employer record as cancelled one year only (COYO) against the correct year

If the correct year was entered

No further action is required as the year is already cleared

Employer record has moved

This action must be taken when you have been unable to clear a year cancelled one year only because the employer record has moved. This could be where the employer record has been

Transferred
Merged

Succeeded

Use Function AMEND or VIEW EMPLOYER SCHEME HISTORY to view the new employer reference
If the new employer reference remains in your responsible Organisation Unit

Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to record the year on the employer record as cancelled one year only (COYO)

Send the correspondence to the new office immediately

Year already cleared

This action must be taken when you have attempted to clear a year cancelled one year only where

The cancelled one year only (COYO) indicator is already set
A return has already been received and a charge has been processed

Review the papers and check that the correct year was entered

Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to update the employer record as cancelled one year only (COYO) against the correct year

If the correct year was entered no further action is required as the year is already cleared

Large employer

This action must be taken if you have attempted to clear a year cancelled one year only and the employer record has more than 1000 employments attached to it.

Review the papers held to establish if it was appropriate to attempt to cancel the year one year only

If this was not the correct action you must take alternative action to clear the year, for example obtaining a completed return or ceasing the employer record

Select the [Confirm] button to initiate the computer check

Tax credits (for years up to 2006)

Take the following action if you are presented with either of the following error messages

'COYO indicator cannot be set. Tax credits paid in year'
'You cannot select COYO. Tax credits paid in year'

Note: These messages will be displayed for years up to and including 2005/06

Review the papers held to establish if it was appropriate to attempt to cancel the year one year only

If this was not the correct action you must take alternative action to clear the year, for example obtaining a completed return or ceasing the employer record

Use Function VIEW EMPLOYEES

Select 'Linked Employees'

Where exceptionally, more than 10 employee records are displayed

Use EBS Function AMEND EMPLOYER SCHEME HISTORY to enter a cessation date of 31 March 2006 then - go to step 25

‘Date Not Known’ - where you do not know the date you received the information

‘Date Not Applicable’ – where the update is being made from information not received from the employer.

Telephone the employer immediately. Note: Tax credit employment basis will only be linked to an employer record up to 5 April 2006

Advise the employer that you are unable to cancel the year because tax credits have been attached for that year. Confirm for each employee identified whether the employer

Has paid tax credits to any employee identified during that year - go to step 22
Has paid tax credits under a different payroll - go to step 23
Does not know the employees - go to step 24

Advise the employer to complete and submit form P35 and form(s) P14 for the year
If the employees were paid under a different payroll

Use NTC Function Amend PVE Details to transfer the entire PVE award to the correct employer reference then go to step 25

If the employer does not know the employee(s)

Use Form TC681 to notify the Employer Liaison Team (ELT) at the TCO that the applicant is not known to the employer then go to step 25

Incentive appeals

Take the following action if you are presented with the following error message

‘There is an Open Incentive Appeal for the year’ go to step 25

‘There is an Upheld Incentive Appeal for the year’ go to step 26

B/F the papers for 14 days until the outcome of the incentive appeal is know

If the appeal is either withdrawn or denied use either of the following functions to record that the employer record for that year is cancelled one year only (COYO)

Function CANCEL SCHEME ONE YEAR ONLY

Function AMEND EMPLOYER INDICATORS

If the appeal is upheld go to step 26

The record cannot be cancelled one year only

Filed online indicator set

If you are presented with the following error message the record cannot be cancelled one year only

‘A return has been Filed Online for the year’
No further action is required as the year has already been cleared

Final review

Use Function VIEW EMPLOYEES

Select 'Linked Employees'
Where there are more than 10 employees - go to step 29

For each employer record that has live employee records attached send an email to the relevant PAYE section's WAM to advise them of the year for which you are setting the COYO indicator

When a year has been cleared by setting ‘cancelled one year only’ or processing a nil return, it is essential that you ascertain the situation for the current year

Use Function View EMPLOYER SCHEME HISTORY to check whether a Cessation Date is held

Where a Cessation Date is recorded, no further action required – Go to Step 37

Check if any of the following are held on the employer record

Use Function VIEW BROCS, format 3 to check if any payments have been received for the current year
Use Function VIEW BROCS, format 9 to check whether the CLASS 1A NIC indicator is held

Use Function VIEW EMPLOYEES co check whether any of the live employees displayed have a Commencement Date later than 06/04/CY

If any of the above are held on the employer record, no further action is required – Go to Step 37

Go to Step 31

Contact the employer

If you contact the employer by telephone - go to step 32

If you unable contact the employer by telephone - go to step 33

Where you contact the employer by telephone

If, for the current year, the employer makes any of the following – go to step 37

Making payments to directors / employees that are at or above the lower earnings limit
Making payments to any directors / employees who have another job / income
Providing expenses and / or benefits to directors / employees

Making payments to subcontractors

If the employer is not making any of the above – go to step 36

Where you are unable contact the employer by telephone

Issue review letter 1 together with review stencil to the employer
Use Function AMEND EMPLOYER INDICATORS to set the POST indicator
BF papers for 30 days - go to step 35

When the employer returns the stencil your next action will depend on the answers provided

Where the employer confirms that the business has ceased

Use Function AMEND EMPLOYER SCHEME HISTORY to enter the actual cessation date if this falls within CY

31 March CY-1 if the actual cessation date is prior to 31/03/CY-1

‘Date Not Known’ - where you do not know the date you received the information

‘Date Not Applicable’ – where the update is being made from information not received from the employer

Where the employer confirms that no payments are being made or benefits/expenses provided

Use Function AMEND EMPLOYER SCHEME HISTORY to enter 31/03/CY-1 as the cessation date Issue review Letter 3

Where the employer confirms that payments are being made or benefits/expenses provided

Use Function AMEND EMPLOYER TRADE & SCHEME DETAILS to check that the scheme type held for CY is correct and update if necessary

At BF date

If the employer has returned the stencil no further action is required

If the employer has not returned the stencil – go to step 36

Use Function VIEW EMPLOYEES, - LIVE EMPLOYEES

Where there are live employees

Forward a request to the PAYE section to enter a cessation date of 31/03/CY- 1
BF papers for 30 days to check that there are now no live employees

Where there are no live employees

Use Function AMEND EMPLOYER SCHEME HISTORY to enter 31/03/CY-1 as the cessation date

‘Date Not Known’ - where you do not know the date you received the information

‘Date Not Applicable’ – where the update is being made from information not received from the employer

Use Function AMEND EMPLOYER INDICATORS to remove the POST indicator

Issue review Letter 2 to the employer

Final Action

If the employer record has been Cancelled One Year Only following receipt of a complete nil annual return, file away the return

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