PAYE42001 - employer returns: capture employer return - up to 2004: introduction

Note: This section provides details of how to capture employer returns for tax years up to 2003/04

Each employer and contractor must submit an annual return to HMRC. The return is a summary of

• Tax and National Insurance deductions made from employees and subcontractors
• Total payments of tax credits made to certain employees
• Student loan deductions made from employees who are student loan borrowers

There are different types of returns and some employers may submit more than one return of the same or different type in any tax year.

This section covers

• The processes after receipt of the return has been recorded to enable you to capture a return
• The capturing of return information on the Employer Business service (EBS)

And

• Work which results from the capture of the return. For example overpayments

COYO

EBS allows you to clear a year on an employer record cancelled one year only. There are two functions that will let you do this. You can set the COYO year-related indicator using

• Function AMEND EMPLOYER INDICATORS for a single employer record

Or

• Function CANCEL SCHEME ONE YEAR ONLY if you want to clear the year cancelled one year only on a number of employer records

The following subjects give further details

• PAYE21020 - ‘Cancelled One Year Only (COYO)’

And

• PAYE42025 - ‘Nil Returns - Up To 2004’

Overpayments (supervision and authorisation)

The function OVERPAYMENT DISPOSAL allows you to advise Banking Operations how to deal with an overpayment.

A new function AUTHORISE OVERPAYMENT DISPOSAL was introduced in April 2004 to enable authorising officers, with the EBS Supervisory role, to authorise or delete the instruction.

The manual procedures for dealing with non-automated overpayments (P565 procedures) will remain and these will still need to be authorised. PAYE47000 onwards deals with all aspects of overpayments.

P228

Function VIEW EOY RETURN HISTORY allows you to view all P228s that have been produced following the capture of a return. As a result there will only be one copy of the P228 produced for onward submission with the P14s to NICO. See PAYE41020 for further details.

Tax Credits

The introduction from April 2001 of tax credit information on a return means that there will be different work that staff on employer units will need to do. Tax credit funding discrepancies will need to be reconciled with the employer. See PAYE46105 and PAYE53010 for further information.

Student Loan Deductions

From April 2000, HMRC took responsibility for the collection of Student Loan repayments. Employer unit staff however will normally have no involvement with Student Loans EOY matters, other than capturing the total deduction figure from form P35. PAYE46025 gives general information on this subject.

From October 2004 Employer Unit staff took additional responsibility for obtaining additional returns and P14s from the employer following discovery of errors or omissions by the Student Loan Unit.

Data Protection Act

The provisions of the Data Protection Act 1998 (DPA) apply to employer records in the same way as they apply to taxpayer records on other HMRC computers.

You must only access an employer record if you have a business need to do so.

Bear in mind that an audit trail is created every time you access an employer record. Any unauthorised or inappropriate accesses will be considered for action under the Department’s Conduct and Discipline rules, and may constitute a criminal offence.