PAYE93055 - Reconcile individual: end of year reconciliation: work item 438 - mismatched NT code (Action Guide)

Work item 438 is created at the point at which P14 details are posted to the NPS database and is created in the following circumstances

The P14 has a tax code of NT on it (operated on any basis) but a cumulative NT code was not the last one issued to the employer
The P14 has a tax code other than NT on it but a cumulative NT code was the last one issued to the employer
The P14 has a tax code of NT on it (operated on any basis), a cumulative NT tax code was the last one issued but, tax has been deducted on the P14 in question

At the point at which the work item is created the system will automatically set the Inhibit Automatic Reconciliation indicator (PAYE93015) against the tax year to which the P14 refers.

For cases where a P14 creates work item 438, it is possible for work item 306 (PAYE93062) to be created in respect of the same P14.

For Bankruptcy cases only, where work item 438 has been created in respect of the year in which the customer became bankrupt, you should proceed as follows

Review the year in accordance with the Bankruptcy guidance at PAYE93036
Having regard to PAYE93036, set the year on NPS to ‘Reconciled - Balanced’ where directed to in the guidance or, to ‘Reconciled- SA’ if the year needs to be set up on SA
Update work item 438 with details of the action taken and close the work item
Update Contact History with details of the action taken

For all other cases, follow steps 1 - 10 below. This guide is presented as follows.

Initial action	Step 1
P14 shows code NT but a cumulative NT code was not the last one issued	Steps 2- 6
Other cases	Steps 7- 8
Update / close the work item	Steps 9 -10

Initial action

1.	Review the case to determine the reason as to why work item 438 has been created. Where the work item has been created as
	The P14 has a tax code of NT on it (operated on any basis) but a cumulative NT code was not the last one issued to the employer, go to step 2
	The P14 has a tax code other than NT on it but a cumulative NT code was the last one issued to the employer, go to ‘Other cases’ at step 7
	The P14 has a tax code of NT on it (operated on any basis), a cumulative NT tax code was the last one issued but, tax has been deducted on the P14 in question, go to ‘Other cases’ at step 7

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P14 shows code NT but a cumulative NT code was not the last one issued

2.	Where the P14 has a tax code of NT on it (operated on any basis) but a cumulative NT code was not the last one issued to the employer)
	For cases where the employment concerned is ongoing, review the customers CY code against the P14 and in cases where indications are that the employer may have carried an incorrect code forward into CY, reissue the CY code
	Go to step 3
3.	Review the case / P14 in accordance with PAYE90020 and SPD 60 to determine whether or not employer error applies with regard to the employer operating an incorrect code and, where it does, to determine whether or not any underpayment arising in respect of it falls to be collected from the employer or the employee (customer). Where
	Employer error applies and the underpayment is to be collected from the employer, go to step 4
	Where employer error does not apply and for cases where it applies and the underpayment is to be collected from the employee, go to step 6
4.	Having regard to the employer error instructions, where the underpayment is to be collected from the employer and
	A P14 is received in respect of the further tax owing, go to step 5
	A P14 is not received in respect of the further tax owing, update the customers record in accordance with PAYE92066 to give a notional tax credit in respect of the tax owing by the employer
	Go to step 5
5.	Update the customer’s record / reconcile the year in accordance with steps 1 - 4 of PAYE92046. In doing so you should
	Update the record to show the full pay and tax (if any) shown on the NT coded P14
	For cases that cannot be reconciled immediately ensure that the Inhibit Automatic Reconciliation indicator (PAYE93015) is unset in accordance with step 4 of the guidance
	Go to step 9
6.	Where the underpayment is to be recovered from the employee
	Update the customers record in accordance with step 5 above
	Go to step 9

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Other cases

7.	For cases where the P14 has a tax code other than NT on it but a cumulative NT was the last one issued to the employer
	And / or
	A P14 has a tax code on it of NT (operated on any basis), a cumulative NT tax code was the last one issued but, tax has been deducted on the P14
	For cases where the employment concerned is ongoing, review the customers CY code against the P14 and in cases where indications are that the employer may have carried an incorrect code forward into CY, reissue the CY code
	Go to step 8
8.	Update the customer’s record / reconcile the year in accordance with steps 1 - 4 of PAYE92046. In doing so you should
	Update the record to show the full pay and tax (if any) shown on the NT coded P14
	For cases that cannot be reconciled immediately, ensure that the Inhibit Automatic Reconciliation indicator (PAYE93015) is unset in accordance with step 4 of the guidance
	Go to step 9

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Update / close the work item

9.	Update the work item with details of the action taken and close the work item
10.	Update Contact History with details of the action taken

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