PAYE21031 - employer records: maintain employer record: cessation of an employer record (Action Guide)
To cease an employer record follow steps 1 - 31 below. The
Guide is presented as follows
| Checks to be made before cessation | Step 1 |
| Check the scheme type | Step 2 |
| Check for payments | Step 3 |
| Check for tax credits | Steps 4 - 13 |
| Check for Class 1A liability | Steps 14 - 16 |
| Magnetic media indicators | Steps 17 - 21 |
| EDI indicator present | Step 22- 23 |
| Employee records | Steps 24 - 26 |
| CIS deductions | Steps 27 - 28 |
| Final action | Steps 29 - 31 |
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.
Checks to be made before cessation
- Review the information provided. Satisfy yourself that the
employer record is no longer required. See
PAYE21030 for further information
Check the scheme type
- Use Function VIEW EMPLOYER TRADE AND SCHEME DETAILS to check
the scheme type
- If the employer record is a simplified scheme mark the papers (if you are processing a return) ‘simplified scheme’ in red ink
Check for payments
- Use Function VIEW BROCS (format 3) Posting Summary to check
that no payments of tax or NI Contributions appear for a subsequent
year
- If incorrect payments are shown on the record
- Arrange for DMB to reallocate the payment
- Where the payment is correct
- Advise the employer that you are unable to cease the scheme and that they must complete a return as usual
Check for tax credits
If the cessation date is 5 April 2005 or earlier use the following to check whether the employer has been authorised to make tax credit payments to employees for a year later than the year of cessation.
- Use Function VIEW BROCS (format 9 Designatory Data for ASN) to
check whether the TC EMPLOYER indicator is set
- Use NTC Function View PVE Details to check that no tax credit
payments have been authorised.
Note: Tax credits will only be paid by an employer
for years up to 2005-06
Where the employer has been authorised to pay tax credits
- Use Function VIEW EMPLOYEES
- Select ‘Linked Employees’
- Identify the tax credit employments attached to the employer record after the year of cessation
- Where exceptionally, more than 10 employee records are attached to the employer record, go to step 14
- Advise the employer that you are unable to cease the PAYE
scheme because they have been authorised to pay tax credits for a
year after the year of cessation. Confirm whether
- Tax credits were paid to the employees listed during that year - go to step 8
- If the employer paid the employees under a different payroll - go to step 9
- If the employer does not know the employees go to step 26
Tax Credits Paid
- Advise the employer to complete and submit form P35 and form(s)
P14 for the year and agree the correct cessation date
Tax Credits 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 11
Employee not known
- If the employer does not know the employee(s) listed use Form
TC681 to notify the Employer Liaison Team (ELT) at the TCO that an
applicant is not known to the employer then go to step 11
All cases
- Use Function AMEND EMPLOYER SCHEME HISTORY to enter a cessation
date of 31 March for the year that the latest tax credits where
paid
Note: Where the scheme type is PSC or XP you must enter a ‘Date Notified’, which is the date you received the information or select one of the following check boxes
- ‘Date Not Known’ - where you do not know the date you received the information
Or
- ‘Date Not Applicable’ – where the update is being made from information not received from the employer
Intervening Years
If there is an intervening year for 2003-2004
- Follow the Action Guide ‘Nil Returns - Up to 2004’
PAYE42026 to process a proforma nil
return
If there is an intervening year for 2004-2005 or 2005-2006
- Follow the Action Guide ‘Nil Returns - 2005’
onwards
PAYE43031 to process a proforma nil
return. For this situation only set RSI 2 when recording receipt of
the return
Check for Class 1A liability
- Use Function VIEW BROCS (Format 9 Designatory Data for ASN) to
check whether the CLASS 1A NIC EMP indicator is held for the year
after the year of cessation
- If this indicator is set and you are certain that this is a true cessation use ECS (screen P11D(b)) to remove the indicator for any year(s) later than the year of cessation
- If this indicator is set and a P11D(b) is due do not enter a cessation date
- Use Function VIEW EMPLOYER INDICATORS to check whether any of
the following indicators are set
- AUDREP
- COMPREP
- LUMPSUM
- RNA
- TRADISP
- WRONGOP
If any of the indicators are set follow step 16
- Use Function VIEW EMPLOYER NOTES and check the employer record
pad to review the information recorded
- Find the report relating to the indicator(s)
- Forward a Memo to Debt Management - Cessation - indicators set
- Attach the report to your memo
Magnetic media indicators
If you enter a cessation date when COP holds magnetic media
indicators the cessation date will be rejected on COP
To avoid this you should take the following action
- Use COP Function ED to check whether any of the following
magnetic media indicators are set
- MTL (Magnetic Tape List)
- MTP6 (Magnetic Tape P6)
- Contact the appropriate Data Centre and ask them to remove the
indicators. Include the following details
- Name of employer
- Office number
- Employer reference
- Accounts Office reference
- Date of cessation
- BF your papers
- At BF review
- If the magnetic media indicator has been removed from COP. You may then proceed to enter a cessation date
Otherwise
- Issue a reminder to the appropriate Data Centre requesting immediate action to remove the indicators
When the indicators have been removed
- Use Function AMEND EMPLOYER SCHEME HISTORY to enter the
cessation date
Note: Where the scheme type is PSC or XP you must enter a ‘Date Notified’, which is the date you received the information or select one of the following check boxes
- ‘Date Not Known’ - where you do not know the date you received the information
Or
- ‘Date Not Applicable’ – where the update is being made from information not received from the employer
EDI Indicator present
If you have attempted to enter a cessation date on an employer record but the following error message is presented ‘EDI indicators prevent cessation of employer record’ you must
- Put the case to one side for
5 days to await action by the EDI Live Service
Team to clear the case from the ‘EDI Cess/Canc
Exceptions’ Work List
- After 5 days (if the EDI Live Service Team have not been in
contact with you to discuss the next action to take)
- Use Function AMEND EMPLOYER SCHEME HISTORY to attempt to enter a cessation date again
Note: Where the scheme type is PSC or XP you must enter a ‘Date Notified’, which is the date you received the information or select one of the following check boxes
- ‘Date Not Known’ - where you do not know the date you received the information
Or
- ‘Date Not Applicable’ – where the update is being made from information not received from the employer
- If the cessation date is accepted go to step 22
Otherwise
- If you are still unable to set the cessation date contact the Online Services Helpdesk and
- Explain that you have been unable to enter a cessation date on the employer record because EDI indicators are already set
- Agree with EDI Live Service Team what action should now be taken
Employee records
If you try to enter a cessation date and there are live PAYE
employments attached to an employer record you will be presented
with the error message ‘You cannot enter a cessation date.
Live taxpayer records attached to scheme’.
If you receive this message
- Use EBS Function VIEW EMPLOYEES
- Select ‘Live Employees’ to identify the employments attached to the employer record
- Telephone the employer
immediately
- Explain that you are trying to close the taxpayer record but it holds live employee(s)
- Establish the date on which the employee(s) left the employment
And
- Request form(s) P45
- Where Employees not known
- Forward an email to the relevant PAYE section WAM to advise them that the employer does not know the employees. Include a list of employees with the following information
- Name
- NINO
- Request a Date of Leaving be entered onto each employee record
CIS deductions
If the employer record holds details of CIS deductions for a later year the following error message will be displayed ‘CIS Dedns Suffered held on the record for a year later than you have entered’
- Review the papers held to establish if it is appropriate to
attempt to cease the employer record
- If this was not the correct action consider alternative action
Otherwise
- Telephone the employer
immediately
- Explain that you are trying to close their record but it holds CIS deductions for a later year
- Establish the correct cessation date
Final action
- Advise the relevant CT / SA Team if applicable of the cessation
- Review previous years to establish if it is appropriate to set
the COYO indicator or process a return to clear the year
- Use Function AMEND EMPLOYER NOTES to record your actions and then file the papers in the employer record pad
