PAYE94061 - Reconcile individual: in-year reconciliation: unemployment repayments (Action Guide)

To carry out the Assistant Officer duties required when reviewing a claim for an unemployment repayment, consider steps 1 - 11 below. The guide is presented as follows

First repayment claim Steps 1 - 2
Subsequent repayment claims Steps 3 - 5
Underpayments for earlier years Step 6
Change of tax code during unemployment Step 7
Other sources of income Step 8
Trigger calculation Step 9
Other issues in calculating repayments Steps 10 - 11

If you receive a claim for repayment of tax (normally on form P50 or P52), where the individual advises that no taxable benefit is being claimed (Jobseekers Allowance, Taxable Incapacity Benefit or Employment and Support Allowance), but they have registered with the Benefits Office for other reasons take the following actions

First repayment claim

1. Check the form P45 provided by the individual to ensure that it is an original (not photocopy) and any other information obtained. If there are concurrent employments you will not be able to process the claim until all original forms P45(1) have been received
 
  • Amend the P45(1) figure on the NPS record if you hold details of a lump sum termination / redundancy payment which is not reflected in the P45(1) figure, for example, if details of the payment have been provided on a letter rather that on the P45
 
  • If the individual was paid weekly, determine the end of the income tax week in which the last pay day fell
 
  • If the individual was paid monthly, determine the income tax week which includes the end of the income tax month in which the last pay day fell
2. Go to step 6

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Subsequent repayment claims

  Subsequent repayments are normally covering 4 complete weeks. They are claimed on form P52
3. Check the P52 and calculate the number of complete weeks claimed
4. If the number of complete weeks is less than 4, consider how long the period of claim is for
 
  • If the period of claim is only for 2 weeks or less and the individual has not claimed hardship
 
    • Telephone or write to the individual explaining that it has only been a short time since the last claim and ask them to submit another claim in 2 weeks time as claims are normally only made for 4 complete weeks at a time
 
  • If the period of claim is 3 complete weeks or the individual is claiming hardship go to step 6
5. If the number of complete weeks is 4 or more go to step 6

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Underpayments for earlier years

6. Check Reconciliation Summary to see if there are any underpayments for earlier years
 
  • If there are underpayment(s) for earlier year(s) and any part of this has been included in the tax code for the year of claim
 
    • Use the tax code which takes account of this underpayment in the repayment calculation
 
  • If there are underpayment(s) for earlier year(s), but no part of this has been included in the tax code for the year of claim
 
    • Do not restrict repayment to collect any part of an underpayment for an earlier year

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Change of tax code during unemployment

7. Check if the tax code has changed during the period of unemployment. The PAYE Service can only calculate the unemployment repayment using the tax code input from the form P45
 
  • If the code has not changed use the latest code for the year to calculate the repayment
 
  • If the code has increased or decreased consider preparing the repayment manually using tax tables, if the outcome of not using the updated code is an under or overpayment above tolerances. PAYE91063 refers to the issue of manual payable orders
  Note: Where an in-year repayment is made manually, revised P45 parts 2 and 3 are not automatically issued by PAYE Service. Manual P45 parts 2 and 3 should be prepared and issued with a form P52 to the customer.Manual forms P45 can be ordered by sending an email to emporderline.ir@gtnet.gov.uk. A maximum of 10 forms can be requested per order. Forms P45 remain a restricted form and the order / email must be authorised by a manager. The full postal address of the office and a contact name will be required with the order.

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Other sources of income

8. Input into the relevant IABD screen any income arising in the year from
 
  • Untaxed casual earnings declared on forms P50 or P52. Any resulting tax code change will not be taken into account when calculating the unemployment repayment as detailed in step 7
 
  • Additional untaxed Jobseekers Allowance reported on from P180 by the Benefit Office
 
  • Untaxed benefit received during a lay off or trade dispute reported on form P181
 
  • Untaxed benefit from an earlier claim not included in gross pay on part 3 of form P45

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Trigger calculation

9. Trigger an unemployment repayment by selecting the form type and date of receipt of the following forms on the IABD screen. The first Unemployment Repayment claim of a series must always be input as a P50. (Care should be taken when entering the date of claim as if the claim is cancelled then a further claim cannot be entered for a further 28 days)
 
  • P50 (noted as unemployment will trigger an unemployed type calculation)
 
  • P52 (will trigger an unemployed type of calculation. If this claim is made within 28 days of the previous repayment the system will inhibit the calculation)
     
    You will be presented with a ‘Date of Claim’ field
     
    You must
 
  • Input the date of claim as entered on the P50 / P52
  For both forms the ‘Unemployment results’ screen will be displayed. See PAYE94065 and PAYE94070 for the action to take if the result is an underpayment or balanced or an overpayment and how to action subsequent claims

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Other issues in calculating repayments

  Consider the following issues that may apply in unemployment repayment cases
10. An individual cannot make a claim for repayment if they are receiving taxable benefit. However it is possible to make a claim following the end of a claim to taxable benefit and form P45(U) from the Benefit Office will provide details of the taxable benefit paid
 
  • Review form P45(U) from the Benefit Office to check if the tax code is non cumulative
 
  • If the code is non cumulative, form P45(U) will only show the taxable benefit paid
 
    • Use NINO Quick Search to call up the record then view the Employment Maintenance screen to locate information of any pay and tax details for employments during the year of claim
 
    • Use the information found when calculating any repayment
 
  • If the code is cumulative, the information on form P45(U) can be used to calculate the repayment, but if an individual remains unemployed after the end of a taxable benefit claim, you will also need a satisfactory explanation of why the taxable benefit is no longer claimed and Parts 2 and 3 of form P45
11. The Benefit Office will report any reduction in taxable benefit to you on form P180
 
  • Reduce the gross figure of pay in your calculations accordingly

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