PAYE94046 - Reconcile individual: in-year reconciliation: trivial commutation repayment calculation (Action Guide)

To carry out the Assistant Officer duties when making an in-year repayment for a trivial commutation payment, consider steps 1 - 12. The guide is presented as follows

Request for a claim form for in-year repayment Steps 1 - 3
Action on receipt of form P53 Steps 4 - 6
In-year reconciliation Steps 7 - 12

This action guide does not apply to claims made by non-residents. If you receive a claim from a non-resident, you should follow guidance at PAYE81020.

Request for a claim form for in-year repayment

1. Has the customer requested a form P53 upon which to make the claim?
 
  • No - Go to step 2
 
  • Yes - Go to step 3
2. The form P45 tells the customer to ask for form P50 to request a repayment. However the claim for repayment in these cases must be on form P53. If the request is not for form P53 you should
 
  • Ask the customer why they think that a repayment is due
 
  • Check the employer reference shown on the form P45
  Where it is apparent that the claim is in respect of a trivial commutation
 
  • Determine whether the customer is PAYE/SA, SA only or PAYE only
 
  • Ask the customer what other sources of income they receive, select the correct version of the P53 (PAYE or SA) on OCA and tailor the OCA form P53 so that only relevant details are requested
 
  • Issue the OCA P53 asking the customer to return the form to their current PAYE office (not necessarily to the office where the pension / annuity reference is held)
 
  • Add a manual Contact History note to show a P53 has been issued, see PAYE105016 
3. Where the customer has requested form P53
 
  • Determine whether the customer is PAYE / SA, SA only or PAYE only
 
  • Ask the customer what other sources of income they receive, select the correct version of the P53 (PAYE or SA) on OCA and tailor the OCA form P53 so that only relevant details are requested
 
  • Issue the P53 asking the customer to return the form to their current PAYE office (not necessarily to the office where the pension / annuity reference is held)
 
  • Add a manual Contact History note to show a P53 has been issued, see PAYE105016 

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Action on receipt of form P53

  When you calculate a repayment using the information provided on form P53, you will need to estimate annual income and make the informal reconciliation on that basis.
4. Is a form P45 enclosed?
 
  • Yes - Follow ‘Form P45 review (Action Guide)’ at PAYE91026 and then return to step 5 of this Action Guide
 
  • No - Follow ‘Form P45 review (Action Guide)’ at PAYE91026 steps 16 onwards and then return to step 5 of this Action Guide
5. Is the individual a Job Seekers Allowance (JSA) claimant?
 
  • Yes - Go to step 6
 
  • No - Go to step 7
6. Where the individual is a JSA claimant
 
  • Assume that the JSA claim continues to the end of the tax year
 
  • Estimate the amount of JSA to be received and carry out a week 52 tax table check (excluding the trivial commutation payment) using that amount of JSA and the relevant tax code
 
  • Assume that the Department for Works and Pensions (DWP) will repay any difference between this tax figure and the amount of tax shown on the P45 from the previous employment
 
  • Use the net figure from the tax table check in the informal tax calculation, unless the code at the previous employment was on a week 1 basis, in which case the full amount of the tax should be included
 
  • Continue from step 7

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In-year reconciliation

7. From 6 April 2009 where there is a PAYE Service record with an SA link, then repayment can be made in-year, you must 
 
  • Not issue an informal tax calculation from the NPS record
 
  • Instead use SA Function ‘CREATE FREESTANDING CREDIT’ refer to SAM110271 for further guidance
 
  • Calculate the liability for the year using the R37 calculator on SEES using the income shown on the completed form P53 and on the P45 (2 and 3). If a continuing source of income is shown on the form P53 against which a code is being operated, use the Tax Table Function to estimate the amount of tax that will be deducted on that source by 5 April and give credit for it in the calculation
  Where an in-year reconciliation is to be issued and all sources of PAYE income have ceased, the repayment can be done using NPS
  On receipt of the P53 you should trigger the reconciliation by inputting the information into 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
  Where an in-year reconciliation is to be issued and there are ongoing sources of PAYE income (including interim R40 current year repayment claims PAYE79031 and PAYE79032 refers), the repayment cannot be done on the PAYE Service. You should issue the repayment manually by following steps 8 - 10 
  Note: Where CY-1 has been reconciled with an underpayment or overpayment generated (and this has not been repaid or collected), this liability should be carried forward to be included in the in-year calculation.
8. Use the figures provided on the completed P53 and on the P45(2 and 3) to calculate any refund due using the R37 calculator on SEES. If a continuing source of income is shown on the form P53 against which a code is being operated, use the Tax Table Function to estimate the amount of tax that will be deducted on that source by 5 April and give credit for it in the calculation
 
  You do not need to record receipt of the P53 in IABD in these circumstances
  Where a repayment is due
 
  • Prepare a SEES R37
 
  • Request the issue of a Manual PO by completing the SEES Payable Order Request Form (PORF) and email it to your authoriser (PAYE91062)
 
  • Make a manual note in Contact History (PAYE105016) with the details of the action taken
 
  • Make a manual note in Contact History with the details of where the claim papers are held
 
  • Set the Inhibit Auto Reconciliation indicator within Reconciliation Summary screen
 
  • Set the No repayment Indicator and include a note in the additional notes box
9. Review and update CY and CY+1 codes if necessary
10. Once the PORF has been received back and the Payable Order has been issued, the Supervising Officer must 
 
  • Within the Payable Order Control role, record the issue of the manual repayment by accessing the Accounting Financial Events Summary screen and selecting the Repayment Summary screen
 
  • Record
 
    • The amount of the repayment
 
    • The PO Serial number
 
    • The date of issue of the repayment
 
    • The person to whom the PO has been issued if this is a nominee
 
  • Return the claim to the requesting officer to follow steps 11 - 12
  Note: No work item 119 will automatically be created in PAYE Service as the in-year repayment was dealt with manually. You should follow steps 11 - 12 to create a manual work item 238
11. Create a manual work item, see PAYE110081, and BF until 6 April following the date the claim was made
12. Make a manual note in Contact History, see PAYE105016, explaining why the manual work item was created, this can be added to the Contact History note at step 8

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