PAYE92065 - taxpayer end of year: posting P14 to taxpayer record: under-deductions - action required in service teams

The information below

• Tells you about or identifies the location of guidance material relating to cases involving
• • An under-deduction of PAYE, and
  • The use of ‘reasonable care’ and ‘good faith’ to excuse the failure to deduct

• Provides guidance for dealing with these cases in local offices. This guidance now supersedes all other guidance
• Outlines the role of the PAYE Error Unit (PEU), which is managed by Debt Management and Banking

The remainder of this subject is presented as follows

Background

Identifying cases

Reviewing cases

Background

There are several places in this manual where ‘honest mistakes’ made by employers in the operation of PAYE are discussed. For further background information refer to subjects

• PAYE90020: ‘PAYE Directions’
• PAYE93085: ‘Open Case Reason - Failed Tax Table Liability Test’
• PAYE92060: ‘Revision Of Employer’s Returns’
• PAYE92050: ‘PAYE Errors Unit (PEU)’

Identifying cases

Once P14 details have been passed to COP, cases should be identified quickly wherever possible, so that enquiries can be made as soon as possible after the end of the tax year in which the under deduction arose.

Cases are most easily identified when reviewing

• PAYE open cases, where the reason the case is open is ‘Failed Tax Table liability test U/P £ (Amount)’, or
• The SA weekly ‘PAYE TAX TABLE FAILURES REVIEW’ lists where there is an underpayment

Offices may wish to use eOpen Lists to identify cases

• By employer - by putting all cases of this type into separate allocations for each employer, or
• By using the following filters
• • Ignore Workloads
  • Ignore Allocations
  • Case Status ‘Any’
  • Non clearance reason ‘Failed Tax Table liability test - underpayment’, and
  • The appropriate employer reference

This will give you a full picture for the entire scheme, even if individual cases have already been worked. (Please remember that these cases may be open for other reasons in addition to the failed tax table liability test).

The amount of the underpayment in each case will have been calculated by the computer system and will be present on the SA list or the eOpen List Work Case screen.

Reviewing cases

All cases that have been identified must be reviewed by an experienced member of staff of at least Officer grade.

It is good practice to keep a register for the Area of employer references / employees for whom regulation 72(5) condition A action has been considered. This will assist if problems / enquiries are made later and will show what action was considered in appropriate cases.

The Action Guide at PAYE92066 must be followed when reviewing these cases.