PAYE43001 - employer returns: capture employer return - 2005 onwards: introduction

Note: This section provides details of how to capture employer returns for tax years 2004/05 onwards

Reference to CIS in this information applies to the old CIS scheme for to years up to April 2007, when ‘New CIS’ was introduced.

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. From April 2005 returns for year 2004/05 can be submitted in parts when using online filing or Magnetic Media. If an employer intends to send the whole return by paper, then the return must be submitted as a complete return and not in parts.

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

• ‘Cancelled One Year Only (COYO)’ PAYE20120

And

• ‘Nil Returns – 2005 Onwards’ PAYE43030

Overpayments (supervision and authorisation)

A new function OVERPAYMENT DISPOSAL introduced from April 2001 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. Information about all aspects of overpayments can be found in the section ‘Employer Return – Overpayments’ PAYE47000.

P228

Function VIEW EOY RETURN HISTORY allows you to view all P228s that have been generated following the capture of a return for years up to 2004 and the recording of the receipt of a return for years 2005 onwards. As a result there will now only be one copy of the P228 produced for onward submission with the P14s to NICO. Subject ‘Form P228’ PAYE41020 provides further details.

Tax Credits

The introduction from April 2001 of tax credit information on a return means that there will be different work that staf on employer units will need to do. Tax credit funding discrepancies will need to be reconciled with the employer. The subject ‘Tax Credits’ PAYE46100 and the Action Guides PAYE53011 and PAYE53012 give 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. The subject ‘Collection Of Student Loans (CSL)’ PAYE46025 gives further 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.