PAYE21056 - Employer records: maintain employer record: dormant employer records (Action Guide)

1.

Check that the information provided satisfies the criteria for making an employer record dormant. That is, a limited company

• Is currently inactive

And / or

• Is not expected to pay any earnings to employees liable to PAYE and / or NIC, or provide benefits that are liable to Class 1A NIC for a number of years

Note: The Dormant indicator is only appropriate where the scheme type is ‘P’ (refer to PAYE20135) and the employer is a limited company

Before setting the Dormant indicator checks should be made on the following to ensure the company is not active

• BROCS

• COTAX

And

• EBS

BROCS checks

2.

Use Function VIEW BROCS (Format 3 POSTINGS SUMMARY) to check that no payments of tax / NIC have been made for the current year

• If no payments are shown on the record - go to step 6

• If payments are shown on the record - go to step 3

Where payments are shown on the BROCS record

3.

Use Function VIEW EMPLOYER NOTES and check the employer record pad to review the information recorded

• Contact the employer or their agent to check whether the payment is allocated correctly

The action you take next is dependent on whether the payment was correctly allocated

If the payment has been allocated correctly - go to step 4

• If the payment has been incorrectly allocated - go to step 5

Correct payment on BROCS

4.

Advise the employer that an Employer Annual Return is required for that year and establish the future intentions of the company and take the appropriate action

Payment on BROCS in error

Where the payment has been incorrectly allocated, obtain details to re-allocate the payment

5.

Use Function OVERPAYMENT DISPOSAL or form P565 to inform Banking Operations how to re-allocate the payment. Further guidance can be found in the ‘Overpayment Notification’ Action Guide PAYE47061 

• B/F papers for four weeks

• Use Function VIEW BROCS (Format 3 Postings Summary) to check that the payment has been removed

When this information has been successfully updated on BROCS (the posting has been removed) - go to step 6

Where no payments are shown on the BROCS record

6.

Use Function VIEW BROCS (Format 6 Actions) to check whether there is any indication that the employer has ceased

• If the employer has ceased Use Function AMEND EMPLOYER SCHEME HISTORY to enter the appropriate cessation date

• If the employer has not ceased - go to step 7

Class 1A NIC Employer Indicator

7.

Use Function VIEW BROCS (Format 9 Designatory Data For ASN) to check that the Class 1A NIC EMP Indicator is not set

• If it is set contact the employer to confirm whether Class 1A is due

• If Class 1A is due dormant is not appropriate

• If Class 1A is not due update ECS to remove the indicator, - go to step 8

COTAX checks

8.

Use COTAX Function VTPR to check whether there is a date held against either

• Intent to Strike off

Or

• Struck off

If a date is entered in either of these

9.

Use Function AMEND EMPLOYER SCHEME HISTORY to enter this date as 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

If an Intent to Strike off or Struck off date is not held - go to Step 10

EBS checks

10.

Use EBS Function VIEW EMPLOYEES, Live Employees, to check whether there are any employees attached to the employer record

• If there are no live employees shown - go to step 11

• If live employees are shown - go to step 12

Where no live employees are shown on the employer record

11.

Use EBS Function AMEND EMPLOYER SCHEME HISTORY to enter a cessation date of 31 March of the previous year

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

• Review previous years to establish if it appropriate to set the COYO indicator or process a return to clear the year

Note: If the Dormant indicator is held against the previous year follow the Action Guide ‘Cessation & Dormancy’ PAYE21026.

Where live employees are shown on the employer record

12.

Ascertain whether any employees are directors (Y held against Dir in the View Employees screen)

Your next action will depend on whether any directors are shown

• Where all live employees are PAYE employment basis only - go to step 13

• Where live employees are a mixture of PAYE employment only and PAYE employment with a Y held against director - go to step 15

• Where all live employees are PAYE employment basis with a Y held against director - go to step 17

All live employees are PAYE employment basis only

13.

Forward each employee’s name & NINO to the relevant PAYE sections WAM and request that a Date Of Leaving of 31 March of the previous year is entered onto the employee record

• Use EBS AMEND EMPLOYER INDICATORS to set the post indicator

• BF for 4 weeks

• At BF check whether there are still any live employee records

Your next action will depend upon whether there are any live employee records

• If live employer records are still shown

• Re-BF at 4 weeks intervals until there are no live employee records

• If there are no live employee records - go to step 14

If there are no live employee records

14.

Use EBS AMEND EMPLOYER INDICATORS to remove the Post Indicator

• Use EBS AMEND EMPLOYER SCHEME HISTORY to enter a cessation date of 31 March of the previous year

15.

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

16.

If the Dormant Indicator is held against the previous year, follow the Action Guide ‘Cessation & Dormancy’

Live employees are a mixture of PAYE employment only and PAYE employment with a Y against director

17.

For all live employees with a PAYE employment only basis forward each employees name and NINO to the relevant PAYE sections WAM and request that a Date Of Leaving of 31 March of the previous year is entered onto the employee record then go to step 16

All live employees are PAYE employment basis with a Y held against director

18.

Use EBS Function AMEND EMPLOYER SCHEME HISTORY to set or re-set the Dormant indicator and set the review year to CY+2

Note: The Review Year will be set automatically to CY+4 unless you specify an earlier year.

When the employer advises that payments of earnings to employees are liable to PAYE and / or NIC, take the following action to remove the Dormant indicator and reopen the subsequent accounts years

19.

Use Function AMEND EMPLOYER SCHEME HISTORY to enter the year the employer record is to become active in the Active From Year field

On receipt of the annual review list you must establish whether the Dormant indicator should remain on the employer record.

The list must be reviewed in conjunction with forms P225(T). The following steps inform you of the action required when

• Form P225(T) is completed and returned. Go to step 19

• Form P225(T) is not returned. Go to step 20 below

• Form P225(T) is returned RLS. Go to steps 23

20.

If the form P225(T) is completed and returned

• Note the receipt of the form P225(T) on your review list

21.

The action to take is dependant on the information provided on the completed form P225(T)

Where the P225(T) shows

• There is No PAYE liability - go to step 2

• There is some PAYE liability

• Use Function AMEND EMPLOYER SCHEME HISTORY to enter the year the employer record is to become active in the Active From Year field

• The intention of the company is not to trade

• Use Function AMEND EMPLOYER SCHEME HISTORY to enter a cessation date of 31 March CY-1. Further guidance in ‘Cessation and Dormancy' Action Guide PAYE21026 

22.

If the form P225(T) is not returned

• Review all cases on the review list on a regular basis and record your actions on the list

23.

Use the following methods to obtain further information to decide whether the employer record should remain dormant

• Issue a reminder for the form P225(T) to the company

• Contact the company’s agent or a director to obtain the information requested on the form P225(T)

• Then review COTAX - go to step 8

24.

If the form P225(T) is returned RLS

• Follow the ‘RLS Correspondence’ Action Guide PAYE21221to try to obtain a current address

25.

Where a new address is traced, reissue the form P225(T) and follow the ‘Maintain Employer Address’ Action Guide PAYE21161 

26.

Where a new address is not traced

• Use Function AMEND EMPLOYER SCHEME HISTORY to enter the cessation date as 31 March in the previous year. Further guidance in ‘Cessation and Dormancy' Action Guide PAYE21026 

Note: For every employer record where the Dormant indicator is not reset the computer will automatically remove the indicator at the following 6 April