PAYE90031 - Reconcile individual: underpayments: revenue loss - remission of tax (Action Guide)

When considering remissions, follow steps 1 - 23 below. This guide is presented as follows

Remission Steps 1 - 6
Review of remission request and capital resources (Officer duties) Steps 7 - 13
Review of remissions (Higher Officer duties) Steps 14 - 15
Security checks (Higher Officer duties) Steps 16 - 19
Reversing a Revenue loss Steps 20 - 23

Remission

1. Where the underpayment cannot be collected by any other means, you should pass the papers to an experienced officer to consider remitting the underpayment
2. If remission is
 
  • Agreed, go to step 3
 
  • Not agreed, go to step 4
3. If remission is agreed
 
  • Record details of the case on the appropriate list
 
  • Remit the underpayment using the appropriate remission type (PAYE90030)
 
  • Write to the customer / their agent to explain the decision
 
  • Update Contact History with details of the action taken
4. If remission is not agreed and collection of the underpayment owing is
 
  • Less than £3000 and the underpayment can be collected through the customers tax code, go to step 5
 
  • £3000 or more, or less than £3000 and the underpayment cannot be collected through the customers tax code, go to step 6
5. Where remission is not agreed and the underpayment owing is less than £3000 and it can be collected through the customers tax code
 
  • Write to the customer / their agent explaining the decision and the action being taken to collect the underpayment
 
  • Update Contact History with details of the action taken
6. Where remission is not agreed and the underpayment owing is £3000 or more or it is less than £3000 and it cannot be collected through the customers tax code
 
  • At this point, take no further action regarding the underpayment. Where the underpayment
 
    • Has already been collected, no adjustment to it is required
 
    • Has not already been collected, it will be pursued during the course of resolving work item 236 (PAYE90011)
 

Write to the customer / their agent explaining the decision and the action being taken to collect the underpayment (that is, that the underpayment has already been collected or, a Voluntary Direct payment letter and payslip (PAYE90011) will be issued to allow the amount owing to be paid)
 
(Note: For cases already working through work item 236 (PAYE90011) the letter should point out that a letter / payslip regarding the underpayment was issued on DD/MM/YYYY and they should use the payslip concerned to pay the amount owing)
 
  • Update Contact History with details of the action taken

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Review of remission request and capital resources (Officer duties)

  The following duties must be carried out by an Officer
  To carry out the Officer duties required when you receive a request to remit an underpayment, consider steps 7 - 16
7. If the underpayment is less than £1,250 or less than £400 in a HMRC Delay ESC A19 case
 
  • Review the papers provided and the checks that have been made to verify that the underpayment cannot be collected in any way
 
  • If you agree that the underpayment should be remitted, return the papers with a note authorising this, include your name and the date
 
  • If you do not agree that the underpayment should be remitted, return the papers stating your reasons and what further action is required, include your name and date
8. If the underpayment is £1,250 or more or in a HMRC Delay Case (ESC A19) £400 or more
 
  • Review the papers provided and the checks that have been made to verify that the underpayment cannot be collected in any way
 
  • If the appropriate checks have not been made or are not correct, return the papers explaining why you do not agree that the underpayment should be remitted and what further action is required
9. If the underpayment is £1,250 or more also consider whether the individual has assets which could be used to settle the underpayment. This information can be obtained on request from your local RISK team, for example
 
  • Funds in a bank, building society or similar account
 
  • Property which might be used as security for a loan or possibly sold
 
  • Other investments
  Where the individual’s home is the only asset, you should normally support remission when referring the case to the Higher Officer at step 14
10. If you decide that sufficient assets are available
 
  • Return the papers explaining why you do not agree that the underpayment should be remitted, and to follow steps 4 - 6 in this Action Guide
11. If you decide that there are insufficient assets available (if appropriate) and the underpayment should be remitted
 
  • Refer the papers to the appropriate Higher Officer for authorisation
12. If the Higher Officer authorises remission
 
  • Return the papers and authorisation back to the Administrative Assistant or Administrative Officer to carry out step 2 in this Action Guide
13. If the Higher Officer does not authorise remission
 
  • Return the papers explaining why the underpayment should not be remitted, and to follow steps 4 - 6 in this Action Guide

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Review of remissions (Higher Officer duties)

  The following duties must be carried out by a Higher Officer
  Remissions will be passed to you for authorisation from the Officer, once they have made their own checks
14. On receipt of a remission request and papers
 
  • Review the papers and checks that have been made to confirm that the individual’s ability to meet the underpayment has been fully considered
 
  • Consider the individual’s ability to meet the underpayment and the enquiries undertaken by the Officer regarding capital resources
15. Following your review
 
  • If you authorise remission - mark the papers ‘authorised [name] [date]’ and return the papers to the Officer
 
  • If you do not authorise remission - return the papers to the Officer with an explanation of why you cannot agree remission, who will refer the papers back to the Administrative Assistant or Administrative Officer to follow steps 4 - 6 in this Action Guide

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Security checks (Higher Officer duties)

  The following duties must be carried out by a Higher Officer
  A nominated Higher Officer, not previously involved with remission orders, should check all working papers for a random sample of remissions made during the account. The sample size depends on the total number of remissions to be checked. Minus entries should be ignored
 
  • 1 remission - check it
 
  • 2 - 29 remissions - check 2
 
  • 30 or more remissions - check 10 per cent
16. Check all the working papers for each sample case
17. Confirm that
 
  • Class of remission shown is correct
 
  • Remission is authorised at the appropriate grade
 
  • Remission is correctly entered on the individual’s record
18. If there are any grounds for suspecting irregularities
 
  • Immediately make a report in duplicate to the Personnel Unit dealing with conduct and discipline matters
 
  • Send a copy of the report to the appropriate senior Manager
 
  • If the record cannot be traced, send a report in duplicate to the appropriate senior Manager immediately
19. When you are satisfied with the remissions in the sample, initial and date your office’s file copy of the list for the cases in the sample

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Reversing a Revenue loss

  It is possible to reverse a Revenue loss and to restore the underpayment status to ‘outstanding’. To do this
20. Go to the Accounting function
21. Select the ‘Reverse Revenue loss’ link on the underpayment screen for the relevant underpayment that has previously been recorded as a Revenue loss. You will be taken to the ‘Reverse Revenue loss’ screen
22. Select the checkbox to the right of the relevant entry
23. Select [Submit]
  The underpayment will be re-instated. If you do not tick the checkbox before selecting [Submit] then you will receive an online message. If you then select [Cancel] you will be returned to the ‘Underpayment’ screen and the HMRC loss will not be reversed

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