PAYE46051 - Employer returns: employer return post capture: form P227 and regulation 72 (Action Guide)

Initial action

Steps 1 - 3

Contacting the employer

Steps 4 - 6

After you have contacted the employer

Step 7

Report to the Debt Management Office

Step 8

The Debt Management Office replies

Steps 9 - 10

1.

Your action depends on the kind of errors the employer has made

• If the error(s) are 'important', all single under-deductions do not exceed £100, and any of the discrepancies are subject to a trade dispute
   
  Or

• If there is any single under-deduction exceeding £100

• • Go to step 8

• If the error(s) are 'important', all single under-deductions do not exceed £100, and are not subject to a trade dispute

• • Go to step 4

• If the error can be regarded as 'unimportant' but 'trade dispute' is shown against any of the discrepancies

• • Go to step 2

• For all other 'unimportant' errors

• • Go to step 3

2.

If the error can be regarded as 'unimportant' but 'trade dispute' is shown against any of the discrepancies

• Issue stencil Repayment Withheld (Trade Dispute) Stencil (Word 30KB) to the Debt Management Office

• In the notes space on form P227 for each relevant employee write

• • 'Reported to Debt Management Office

• • Your initials

• • The date

• You will also need to follow the guidance in step 3 for these employees

3.

For other 'unimportant' errors

• In the 'Notes' column of eachpage of form P227 write

• • 'No Action'

• • Your initials

• • The date

• Bracket together all errors on the page

• If you do not need to contact the employer to clarify any point

• • On each relevant form P14 or card P12, in green ink, note any under-deduction of £15 or more '£(amount) U/D'

• • Note any over-deduction of £7 or more '£(amount) O/D'

• • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche

• • Pass any forms P14 that have been noted as above to the PAYE Section

• • Continue to capture the return - follow the appropriate Action Guide, see

• • • • 'Capturing annual return - up to 2004' PAYE42011 

• • • • 'Capturing annual returns - 2005 onwards' PAYE43011 

4.

You must consider contacting the employer if, after reviewing all information available

• No single under-deduction exceeds £100
   
  But

• The number or nature of the employer's errors make their performance unsatisfactory

5.

If you require an explanation of any under-deductions write to the employer. Keep a copy of your letter with the form P227

• Advise the employer of any error made in adding up the quarterly totals on card(s) P12 if appropriate

• Ask them for their explanation of the apparent over-deduction / under-deduction of tax

• Use Function AMEND EMPLOYER INDICATORS to set the POST indicator on the employer record and put the papers on BF until the employer replies

• If you need only to advise the employer of any error discovered (but not an under-deduction) telephone to explain your findings

• Advise them to forward the amount to Banking Operations with the final payslip from the relevant payslip book

• Keep the papers on one side for five working days

6.

Five working days after the call

• Use Function VIEW BROCS (page 3) and check the POSTINGS SUMMARY to see if the amount has been paid

• If the payment has been made, on form P227 write against each relevant under-deduction

• • 'Paid' in the Notes space

• • Your initials

• • The date

• Go to step 9

Consider the following to enable you to decide whether to

• Forward a report to the Debt Management Office
   
  Or

• To give the employer the benefit of informal directions under Regulation 72

7.

Did the employer act in good faith and take reasonable care to comply with PAYE Regulations

• No - Advise the Debt Management Office why you consider that the employer should not be given the benefit of a direction under Regulation 72

• • Go to step 8

• Yes - If you are satisfied that no further explanation is required bracket together all the errors on the page

• • Write in the Notes space of form P227 'Employer contacted: Pass', your initials and the date

• • On each relevant form P14 or card P12, in green ink, note any under-deduction of £15 or more '£(amount) U/D'

• • Note any over-deduction of £7 or more '£(amount) O/D'

• • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche

• • Pass any forms P14 that have been noted as above to the PAYE Section

• • Continue to capture the return - follow the appropriate Action Guide, see

• • • • 'Capturing annual return - up to 2004' PAYE42011 

• • • • 'Capturing annual returns - 2005 onwards' PAYE43011 

8.

After checking with the PAYE Section for any information held about the discrepancies, prepare your report for the Debt Management Office

• Include

• • The name and address of the employer

• • The employer reference

• • The reason(s) why the form P227 is being referred for consideration

• • Any known reason(s) for the employer's error(s)

• Take a photocopy the form P35 (or all cards P12) for the employer and attach the copy to your report when sending it with form P227

• Retain a copy of all correspondence

• Use Function AMEND EMPLOYER INDICATORS to set the P227 year-related indicator on the employer record

• On each relevant form P14 or card P12, in green ink, note any form P14 or card P12 showing

• • An under-deduction of any amount 'P227' in the space above the boxes for pay and tax totals for the year

• • An over-deduction of £7 or more '£(amount) O/D' (on both copies of form P14)

• • Prepare and note a manual form P14 accordingly if the employer makes his returns on microfiche

The Debt Management Office will mark form P227 to signify their actions and return it with

• Any forms P106 (formal direction)

• Any pro forma additional form(s)

• • P35 with form(s) P14

• • P37 with card(s) P12

Your action depends on the markings made on form P227 by the Debt Management Office

• If the form P227 is marked 'Paid' against each under-deduction and is returned with the return and pro forma additional form(s) P14 or card(s) P12 - the Debt Management Office has collected the under-deduction or is awaiting payment from the employer

• • Go to step 9

• If the form P227 is marked 'P106' or 'Pass' against each under-deduction and is returned with a form P106 for each formal direction - the Debt Management Office has given a formal or informal direction

• • Go to step 10

• Exceptionally if the form P227 is returned with a mixture of the above - the Debt Management Office has collected some of the amounts under-deducted and made formal or informal directions for the balance

• • Review each entry separately and follow steps 9 and 10 as appropriate for each employee

9.

If the P227 is marked 'Paid' and is returned with the return and pro forma additional form(s) P14 or card(s) P12

• On both copies of each relevant form P14 or card P12, in green ink cross out with a single line the figure of tax deducted in the 'Total for year' box and replace it with the figure of 'Tax deductible according to Tax Tables' shown on form P227

• Note any pro forma P14 prepared because the employer makes his return by microfiche

• Advise the PAYE section of your findings

• On the return, in green ink, neatly strike through the figure of tax for the employee and replace it with the correct figure

• On the return, in green ink, neatly strike through the figure of total tax paid and replace it with the correct figure

• Continue to capture the return - follow the appropriate Action Guide, see

10.

If the P227 is marked 'P106' or 'Pass' against each under-deduction and is returned with a form P106 for each formal direction

• On each relevant form P14 or card P12, in green ink, note any under-deduction of £15 or more '£(amount) U/D'

• Note any over-deduction of £7 or more '£(amount) O/D'

• Note any pro forma P14 prepared because the employer makes his return by microfiche

• Advise the PAYE section of your findings

• Continue to capture the return - follow the appropriate Action Guide, see