PAYE46096 - employer returns: employer return post capture: tax credit funding discrepancy - up to 2003 (Action Guide)


When you have identified a Tax Credit Funding Discrepancy, follow steps 1 - 21 below. The Guide is presented as follows

Initial actionSteps 1 - 2
Input errorStep 3
Review funding authorisedSteps 4 - 21


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

You must firstly obtain certain information to resolve the funding discrepancy, then


  1. Use EBS Function VIEW EOY RETURNS HISTORY to check if the Funding Discrepancy Indicator is set

  • If the indicator is set go to step 2
  • If the indicator is not set delete the work item
  1. Compare the captured figure of tax credit funding authorised with the entry made on the return

  • If the figures disagree go to step 3
  • If the figures agree go to step 4

Input error

  1. The amount you have captured is incorrect. You must

  • Prepare a correction return
  • Note in green at the top of the form 'Correction' and the words 'Tax funding adjusted'
  • Enter a Net Adjustment amount which when added to the previously captured figure will result in the consolidated position being equal to the funding figure entered on the return
  • If capturing the correction return resolves the discrepancy remove the Funding Discrepancy indicator by selecting the Funding Discrepancy box to delete the tick

Otherwise

  • Where a discrepancy still exists go to step 17

Review funding authorised

  1. Your next action will depend upon whether the amount of funding shown on the return is more or less than the amount of funding on TCS

  • If the amount on the return is more than the amount held on TCS go to step 5
  • If the amount on the return is less than the amount held on TCS go to step 13
  • If the figures are the same delete the work item
  1. Return funding figure greater than TCS

  • Use TCS Function EMPLOYER FUNDING APPLICATIONS to obtain details of individual funding payments for all applications with pay dates in the return year
  1. Telephone the employer immediately for an explanation of the discrepancy and make a note of this discussion

  • Explain that the amount held on TCS differs from the amount reported on the return
  • Help the employer to establish the reason for the discrepancy if necessary
  • If funding was allocated to a wrong employer reference go to step 7
  • Agree a reduction of the amount entered on the return so that it equals the amount held on TCS
  1. If funding was allocated to a wrong employer reference

  • Identify the individual employees involved
  • Contact the TCS Business Helpdesk (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
  • Provide them with both employer references and any other information they may request
  • P&S Banking & Accounting will arrange for TCS to be updated with the correct details
  • Go to step 12 when the reallocation is confirmed
  1. If you are unable to contact the employer by telephone issue the stock Tax Credit Funding Discrepancy Letter

  • BF your papers for 4 weeks

At BF or on receipt of a reply from the employer

  • If the employer has replied and agreed to the reduction go to step 11
  • If the employer has not replied or has not agreed go to step 9
  1. If the employer was not able to agree the reduction or has not replied

When the Debt Management office have investigated the discrepancy they will send to you either

  • Notification that the employer has 'gone unknown' - go to step 10

Or

  • A proforma correction return - go to step 12
  1. On receipt of notification that the employer has gone unknown

  • Make a prominent note in your file to contact the employer to resolve the discrepancy once an address is found
  • Follow the guidance in Action Guide 'RLS Correspondence' PAYE21221
  1. If the employer was able to agree to the reduced figure held on TCS

  • Prepare a correction return

And

  • Note in green ink at the top of the form 'Correction'
  1. Use EBS Function CAPTURE EOY RETURN DETAILS to capture the pro forma return

  • Remove the Funding Discrepancy indicator by selecting the Funding Discrepancy box to delete the tick

And

  • Process the new figure as a correction return

And

  1. Return funding figure less than TCS

Check whether any part of the funding shown on TCS refers to a later year and is awaiting issue or has been cancelled

  • Use TCS Function EMPLOYER FUNDING APPLICATIONS
  • Highlight separately each entry in the box 'Funding Application'
  • Select 'Edit' on the tool bar menu and select 'Maintain Funding Payments'
  • If you find entries which refer to amounts that are awaiting issue, or have been cancelled or suspended, it means that these funding payments have not been made - go to step 14

Otherwise

  • Go to step 16
  1. Contact Banking Operations (PAYE Unit)

  • Explain what you have found and ask them to reject, amend or delete the appropriate funding applications so that the TCS figure agrees with the return figure
  • Use TCS Function REALLOCATIONS to check this has been done
  1. When confirmation has been received from Banking Operations (PAYE Unit)

  • Using EBS Function CAPTURE EOY RETURN DETAILS to capture a 'correction' return
  • Select the Funding Discrepancy indicator box to delete the tick

Note: Do not make new entries or amend the 0.00 entries in the monetary fields on the screen

  1. Telephone the employer immediately

  • Explain that the amount held on TCS differs from the amount reported on the return
  • Help the employer to establish the reason for the discrepancy if necessary
  • If funding was allocated to a wrong employer reference go to step 17
  • If you discovered excess funding explain that it cannot be reallocated to the current tax year
  • Ask them to agree a correction to the return to agree the TCS figure
  • Make a note of the discussion
  • If you are unable to speak to the employer, or unable to reach agreement
  • Go to step 19
  1. If funding was allocated to a wrong employer reference

  • Identify the individual employees involved
  • Contact the TCS Business Helpdesk (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
  • Provide them with both employer references and any other information they may request
  • P&S Banking & Accounting will arrange for TCS to be updated with the correct details
  1. Where the employer has made an error on the return in respect of tax credit funding and now agrees the TCS figure

  • Prepare a correction return

Then

  • Use EBS Function CAPTURE EOY RETURN DETAILS to
  • Capture the correction return
  • Remove the Funding Discrepancy indicator by selecting the Funding Discrepancy box to delete the tick
  • Enter a Net Adjustment amount which when added to the previously captured figure will result in the consolidated position being equal to the funding figure entered on the return
  1. If you are unable to speak to the employer, or unable to reach agreement

  • Complete the Tax Credits Recovery Stencil (see step 9) and send it to your Debt Management office
  • BF your papers for a reply

When the Debt Management office have investigated the discrepancy they will send you either

  • Notification that the employer has 'gone unknown' - go to step 20

Or

  • A proforma correction return or notification of an amount to be reallocated - go to step 21
  1. On receipt of notification that the employer has 'gone unknown'

  • Make a prominent note in your file to contact the employer to resolve the discrepancy once an address is found
  • Follow the guidance in Action Guide 'RLS Correspondence' PAYE21221
  1. On receipt of a pro forma correction return from the Debt Management office or notification of an amount of funding to be reallocated

  • Use EBS Function CAPTURE EOY RETURN DETAILS to
  • Remove the Funding Discrepancy Indicator by selecting the Funding Discrepancy box to delete the tick

And

  • Process the new figure on the correction return

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