PAYE93081 - Reconcile individual: end of year reconciliation: trivial commutation payments (Action Guide)

An end of year review will arise for one of the following reasons

  • Where work item 119 - ‘EOY -P53 required’ has been triggered
  • Where the customer has returned a completed end of year version of the form P53
  • Where a manual work item has been created for the issue of form P53 after the end of the tax year

Note: In-year repayments from a P53 currently have to be dealt with manually on the PAYE system, so work item 119 will not be triggered.

To action an end of year trivial commutation repayment follow steps 1 - 5 below

1. Is there an existing PAYE Service record?
 
  • Yes - Go to step 2
 
  • No - Go to step 5
2. Where there is an existing PAYE record
 
  • If the existing PAYE record is live, go to step 3
 
  • If the existing PAYE record is ceased, go to step 4
3. Where there is an existing, live PAYE record, issue form P53 (end of year version) - if this has not already been issued or received
 
  • On receipt of the form P53, trigger the reconciliation by inputting the information in to the relevant IABD screens to review the liability using the details of actual income provided on the form P53
  The system will include the amount of any in-year repayment recorded on the ‘Record Manual Repayment’ screen (if any) as a tax office refund
  If the result of the Informal Calculation is a further repayment of any amount
 
  • Issue the repayment to the customer
  If the result is an underpayment of any amount
 
  • Treat this as an over-repayment of tax and issue the Informal Calculation to the customer telling them how you intend to collect the underpayment
4. Where there is an existing ceased PAYE record you should
 
  • Transfer the record into the pension reference
 
  • Issue form P53 (end of year version) if this has not already been issued / received
 
  • On receipt of the P53 you should trigger the reconciliation by inputting the information in to the relevant IABD screens to review the liability using the details of actual income provided on the P53
 
  • Include the amount of in-year repayment (if any) as a tax office refund
 
  • If the result of the Informal Calculation is a further repayment (of any amount)
 
    • Issue the repayment to the customer
 
  • If the result is an underpayment of any amount
 
    • Treat this as an over-repayment of tax and issue the Informal Calculation to the customer telling them how you intend to collect the underpayment
5. Where there is no other tax record, or only a ceased SA record you should
 
  • Check that the trivial commutation payment has been declared on the self assessment tax return
 
  • If it has, no further action is required
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

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