PAYE77042 - PAYE operation: incapacity benefit: form P46(IB): receipt of (Action Guide)

Initial action

Steps 1 - 4

If the latest source commenced prior to incapacity benefit

Steps 5 - 6

If the P6 is returned by the employer

Steps 7 - 9

If the latest source commenced after incapacity benefit

Steps 10 - 11

No live employment record held

Step 12

Live JSA case

Steps 13 - 15

Abroad

Step 16

No trace of individual’s record

Step 17

1.

Select the EMPLOYMENT SUMMARY screen to view current employments

2.

View the entries in more detail by going to the EMPLOYMENT DETAILS screen

3.

Before proceeding check the CONTACT HISTORY screen to view Enotes and to check previous actions taken

4.

If individual has reached state retirement age and state pension is due Incapacity Benefit should not be coded and the form can be scrapped

5.

From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted using details from the P46(IB)

• Set creation source as P46(IB)

• Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000) 

• Show job title as Incapacity Benefit, select [Save]

• Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the incapacity benefit rate using the SEES NOTES PASTER for coding Incapacity Benefit

• Calculate the full annual amount for CY in the same way as for state pension by taking the weekly rate and multiplying by 52. Use week 1 / month 1 basis

• Issue revised code see step 6
   
  Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year, see PAYE61205 

6.

View the IABD LANDING screen

• Enter the individuals Employment Estimated Earnings see PAYE130045and select [Save]

• Enter Incapacity Benefit into the TAXABLE SOCIAL SECURITY BENEFITS screen and select [Save] PAYE130075
  
  Note: Make no attempt to anticipate future changes in the rate of benefit before 5 April

• [Submit] the IABD screen

• Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]

• Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115 and [Submit] to issue the revised tax codes

• Issue tax code NT to DWP as any tax due will be collected through the employment tax code

• Scrap form P46(IB)
   
  Note: If there is a delay in amending the code or a subsequent rate change, code out the actual Incapacity Benefit for CY and the annual amount for CY+1. In these cases the PUP should be retained

7.

If the employee has left their employment and P45 part 1 has not been processed

• Select the Edit Record icon to the right of the employment record on the EMPLOYMENT SUMMARY screen

• Update the EMPLOYMENT DETAILS screen to show potentially ceased [Save]

• Select the Edit Record icon to the right of the incapacity benefit record

• Update the EMPLOYMENT DETAILS screen to show incapacity benefit record is now the primary income source

• Issue a revised tax code see step 9

Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205 

8.

If the employment is still live but the employee is not being paid by the employer

• Select the Edit Record icon to the right of the employment record on the EMPLOYMENT SUMMARY screen

• Use the EMPLOYMENT DETAILS screen to amend the employment status to Secondary [Save]

• Select the Edit Record icon to the right of the incapacity benefit record

• Update the EMPLOYMENT DETAILS screen to show incapacity benefit record is now the Primary income source

• Issue a revised tax code see step 9
   
  Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205 

9.

View IABD screen

• Remove the Incapacity Benefit from the TAXABLE SOCIAL SECURITY BENEFITS screen using the IABD screen see PAYE130075 

• Enter the individuals Employment Estimated Earnings for Incapacity Benefit as 1, see PAYE130045 and select [Save]

• Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]

• From the EDIT EMPLOYMENT ALLOCATION issue the emergency code on a week 1 / month 1 basis to DWP, see PAYE13115 and [Submit] to issue the revised tax code

• Update the CONTACT HISTORY screen to show action taken

10.

Review EBS notes(This text has been withheld because of exemptions in the Freedom of Information Act 2000) If your office appears as a contact point for DWP arrange for a named contact to telephone Tax Liaison Office (TLS) to determine whether IB has ceased

If IB has ceased

• Request total Incapacity Benefit reward received over the telephone

• From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted, using details shown on the form

• Set creation source as P46(IB)

• Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000) 

• Show job title as Incapacity Benefit

• Potentially cease the incapacity record, select [Save]

• Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter Incapacity Benefit leaving details using the SEES NOTES PASTER for coding Incapacity Benefit

• Review tax code see step 11

Note: Before issuing a revised code consider the individual's employment history and the previous tax codes operated during the year see PAYE61205 

11.

View IABD screen

• Enter the leaving Incapacity Benefit reward into the TAXABLE SOCIAL SECURITY BENEFITS [Save] see PAYE130075 

• Review the TAX CODE DETAILS screen, see PAYE11130and [Submit]

• Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115and [Submit] to issue the revised tax codes

• Scrap P46(IB)

If IB is still live or your office is not listed as a contact point for DWP

• Go to step 5 and review from the first bullet

12.

From the EMPLOYMENT SUMMARY screen press the [Insert] button so a primary record for incapacity benefit can be inserted

• Use the INSERT EMPLOYMENT DETAILS screen to create a primary record for Incapacity Benefit, using details shown on the form

• Set creation source as P46(IB)

• Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000) 

• Show job title as Incapacity Benefit, select [Save]

• Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the Incapacity Benefit reward using the SEES Notes Paster for coding Incapacity Benefit

• Enter the individuals Employment Estimated Earnings for Incapacity benefit as 1, see PAYE130045 and select [Save]

• Issue emergency code on a week 1 /month 1 basis to DWP if not already in operation see PAYE61205 

• Scrap the P46(IB)

13.

If a live JSA record is held on the employment summary and the date of commencement is before Incapacity Benefit commenced

• Select the Edit Record icon to the right of the JSA record on the EMPLOYMENT SUMMARY screen

• Use the EMPLOYMENT DETAILS screen to update the JSA record to show potentially ceased [Save]

• From the EMPLOYMENT SUMMARY screen press the [Insert] button so a primary record for incapacity benefit can be inserted

• Use the INSERT EMPLOYMENT DETAILS screen to create a primary record for Incapacity Benefit

• Set creation source as P46(IB)

• Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000) 

• Show job title as Incapacity Benefit

• Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the Incapacity Benefit reward using the SEES NOTES PASTER for coding Incapacity Benefit

• Enter the individuals Employment Estimated Earnings for Incapacity benefit as 1, see PAYE130045 and select [Save]

• Issue PA X to DWP if not already in operation see PAYE61205 

• Scrap the P46(IB)

14.

If a live JSA record is held on the employment summary and the date of commencement is after Incapacity Benefit commenced

• Estimate the amount of Incapacity Benefit received using date Incapacity Benefit commenced to date JSA commenced

• From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted

• Set creation source as P46(IB)

• Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000) 

• Show job title as Incapacity Benefit

• Potentially cease the incapacity record, select [Save]

• Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the leaving Incapacity Benefit details using the SEES NOTES PASTER for coding Incapacity Benefit

• Issue a revised code see step 15

Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205 

15.

View IABD screen

• Enter Incapacity Benefit into the TAXABLE SOCIAL SECURITY BENEFITS screen [Save] see PAYE130075 

• [Submit] the IABD screen

• Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]

• Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115 and [Submit] to issue the revised tax codes

• Scrap the P46(IB)

16.

If individual's address is abroad and a live period of income is traced

• Go to step 5 and review from the first bullet

17.

If a record cannot be traced for the individual see PAYE120015 

• Scrap the P46(IB)