PAYE46051 - employer returns: employer return post capture: form P227 and regulation 72 (Action Guide)

The Guide is presented as follows

Initial actionSteps 1 - 3
Contacting the employerStep 4 - 6
After you have contacted the employerStep 7
Report to the Debt Management OfficeStep 8
The Debt Management Office repliesSteps 9 - 10


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

  1. Your action depends on the kind of errors the employer has made
  • If the error(s) are 'important', all single under-deductions do not exceed £100, and any of the discrepancies are subject to a trade dispute

Or

  • If there is any single under-deduction exceeding £100
  • Go to step 8
  • If the error(s) are 'important', all single under-deductions do not exceed £100, and are not subject to a trade dispute
  • Go to step 4
  • If the error can be regarded as 'unimportant' but 'trade dispute' is shown against any of the discrepancies
  • Go to step 2
  • For all other 'unimportant' errors
  • Go to step 3
  1. If the error can be regarded as 'unimportant' but 'trade dispute' is shown against any of the discrepancies
  • 'Reported to Debt Management Office
  • Your initials
  • The date
  • You will also need to follow the guidance in step 3 for these employees
  1. For other 'unimportant' errors
  • In the 'Notes' column of each page of form P227 write
  • 'No Action'
  • Your initials
  • The date
  • Bracket together all errors on the page
  • If you do not need to contact the employer to clarify any point
  • On each relevant form P14 or card P12, in green ink, note any under- deduction of £15 or more '£(amount) U/D'
  • Note any over-deduction of £7 or more '£(amount) O/D'
  • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche
  • Pass any forms P14 that have been noted as above to the PAYE Section
  • Continue to capture the return - follow Action Guide

'Capturing Annual Return - Up To 2004' PAYE42011
'Capturing Annual Return - 2005 Onwards' PAYE43011

Contacting the employer

  1. You must consider contacting the employer if, after reviewing all information available
  • No single under-deduction exceeds £100

But

  • The number or nature of the employer's errors make their performance unsatisfactory
  1. If you require an explanation of any under-deductions write to the employer. Keep a copy of your letter with the form P227
  • Advise the employer of any error made in adding up the quarterly totals on card(s) P12 if appropriate
  • Ask them for their explanation of the apparent over-deduction / under- deduction of tax
  • Use Function AMEND EMPLOYER INDICATORS to set the POST indicator on the employer record and put the papers on BF until the employer replies
  • If you need only to advise the employer of any error discovered (but not an under-deduction) telephone to explain your findings

Do not request any tax under-deducted or offer to repay any over-deducted, but if the employer offers payment

  • Advise them to forward the amount to Banking Operations with the final payslip from the relevant payslip book
  • Keep the papers on one side for five working days
  1. Five working days after the call
  • Use Function VIEW BROCS (page 3) and check the POSTINGS SUMMARY to see if the amount has been paid
  • If the payment has been made, on form P227 write against each relevant under-deduction
  • 'Paid' in the Notes space
  • Your initials
  • The date
  • Go to step 9

After you have contacted the employer

Consider the following to enable you to decide whether to

  • Forward a report to the Debt Management Office

Or

  • To give the employer the benefit of informal directions under Regulation 72
  1. Did the employer act in good faith and take reasonable care to comply with PAYE Regulations
  • No - Advise the Debt Management Office why you consider that the employer should not be given the benefit of a direction under Regulation 72
  • Go to step 8
  • Yes - If you are satisfied that no further explanation is required bracket together all the errors on the page
  • Write in the Notes space of form P227 'Employer contacted: Pass', your initials and the date
  • On each relevant form P14 or card P12, in green ink, note any under- deduction of £15 or more '£(amount) U/D'
  • Note any over-deduction of £7 or more '£(amount) O/D'
  • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche
  • Pass any forms P14 that have been noted as above to the PAYE Section
  • Continue to capture the return - follow Action Guide

'Capturing Annual Return - Up To 2004' PAYE42011

'Capturing Annual Return - 2005 Onwards' PAYE43011

Report to the Debt Management Office

  1. After checking with the PAYE Section for any information held about the discrepancies, prepare your report for the Debt Management Office
  • Include
  • The name and address of the employer
  • The employer reference
  • The reason(s) why the form P227 is being referred for consideration
  • Any known reason(s) for the employer's error(s)
  • Take a photocopy the form P35 (or all cards P12) for the employer and attach the copy to your report when sending it with form P227
  • Retain a copy of all correspondence
  • Use Function AMEND EMPLOYER INDICATORS to set the P227 year-related indicator on the employer record
  • On each relevant form P14 or card P12, in green ink, note any form P14 or card P12 showing
  • An under-deduction of any amount 'P227' in the space above the boxes for pay and tax totals for the year
  • An over-deduction of £7 or more '£(amount) O/D' (on both copies of form P14)
  • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche

The Debt Management Office replies

The Debt Management Office will mark form P227 to signify their actions and return it with

  • Any forms P106 (formal direction)
  • Any pro forma additional form(s)
  • P35 with form(s) P14
  • P37 with card(s) P12

Your action depends on the markings made on form P227 by the Debt Management Office

  • If the form P227 is marked 'Paid' against each under-deduction and is returned with the return and pro forma additional form(s) P14 or card(s) P12 - the Debt Management Office has collected the under-deduction or is awaiting payment from the employer
  • Go to step 9
  • If the form P227 is marked 'P106' or 'Pass' against each under-deduction and is returned with a form P106 for each formal direction - the Debt Management Office has given a formal or informal direction
  • Go to step 10
  • Exceptionally if the form P227 is returned with a mixture of the above - the Debt Management Office has collected some of the amounts under-deducted and made formal or informal directions for the balance
  • Review each entry separately and follow steps 9 and 10 as appropriate for each employee
  1. If the P227 is marked 'Paid' and is returned with the return and pro forma additional form(s) P14 or card(s) P12
  • On both copies of each relevant form P14 or card P12, in green ink cross out with a single line the figure of tax deducted in the 'Total for year' box and replace it with the figure of 'Tax deductible according to Tax Tables' shown on form P227
  • Note any pro forma P14 prepared because the employer makes his return by microfiche
  • Advise the PAYE section of your findings
  • On the return, in green ink, neatly strike through the figure of tax for the employee and replace it with the correct figure
  • On the return, in green ink, neatly strike through the figure of total tax paid and replace it with the correct figure
  • Continue to capture the return - follow Action Guide
  • 'Capturing Annual Return - Up To 2004' PAYE42011
  • 'Capturing Annual Return - 2005 Onwards' PAYE43011
  1. If the P227 is marked 'P106' or 'Pass' against each under-deduction and is returned with a form P106 for each formal direction
  • On each relevant form P14 or card P12, in green ink, note any under- deduction of £15 or more '£(amount) U/D'
  • Note any over-deduction of £7 or more '£(amount) O/D'
  • Note any pro forma P14 prepared because the employer makes his return by microfiche
  • Advise the PAYE section of your findings
  • Continue to capture the return - follow Action Guide
  • 'Capturing Annual Return - Up To 2004' PAYE42011
  • 'Capturing Annual Return - 2005 Onwards' PAYE43011

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