PAYE77042 - PAYE operation: incapacity benefit: form P46(IB): receipt of (Action Guide)

On receipt of a P46(IB) for the first award, follow steps 1 - 17 below. The guide is presented as follows

Initial action	Steps 1 - 4
If the latest source commenced prior to incapacity benefit	Steps 5 - 6
If the P6 is returned by the employer	Steps 7 - 9
If the latest source commenced after incapacity benefit	Steps 10 - 11
No live employment record held	Step 12
Live JSA case	Steps 13 - 15
Abroad	Step 16
No trace of individual’s record	Step 17

Initial action

1.	Select the EMPLOYMENT SUMMARY screen to view current employments
2.	View the entries in more detail by going to the EMPLOYMENT DETAILS screen
3.	Before proceeding review CONTACT HISTORY to check previous action(s) taken
4.	If individual has reached state retirement age and state pension is due Incapacity Benefit should not be coded and the form can be scrapped

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If the latest source commenced prior to incapacity benefit

5.	From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted using details from the P46(IB)
	Set creation source as P46(IB)
	Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
	Show job title as Incapacity Benefit
	Enter the start tax code as NT, select [Save]
	Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the incapacity benefit rate using the SEES NOTES PASTER for coding Incapacity Benefit
	Issue a revised tax code, see step 6 Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year, see PAYE61205
6.	View the IABD LANDING screen
	Enter the individuals Employment Estimated Earnings see PAYE130045 and select [Save]
	Enter Incapacity Benefit into the TAXABLE SOCIAL SECURITY BENEFITS screen and select [Save] PAYE130075 Note: You must always ensure that you update CY+1 IABD with 52 weeks of the weekly rate received however, make no attempt to anticipate future changes in the rate of benefit before 5 April
	[Submit] the IABD screen
	Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]
	Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115 and [Submit] to issue the revised tax codes
	Issue the DWP Stencil - OCCPEN Cases Only from Office Clerical Assistant (OCA) (This text has been withheld because of exemptions in the Freedom of Information Act 2000) as any tax due will be collected through the employment tax code
	Scrap form P46(IB)

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If the P6 is returned by the employer

7.	If the employee has left their employment and P45 part 1 has not been processed
	Select the Edit Record icon to the right of the employment record on the EMPLOYMENT SUMMARY screen
	Update the EMPLOYMENT DETAILS screen to show potentially ceased [Save]
	Select the Edit Record icon to the right of the incapacity benefit record
	Update the EMPLOYMENT DETAILS screen to show incapacity benefit record is now the primary income source
	Issue a revised tax code, see step 9
	Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205
8.	If the employment is still live but the employee is not being paid by the employer
	Select the Edit Record icon to the right of the employment record on the EMPLOYMENT SUMMARY screen
	Use the EMPLOYMENT DETAILS screen to amend the employment status to Secondary [Save]
	Select the Edit Record icon to the right of the incapacity benefit record
	Update the EMPLOYMENT DETAILS screen to show incapacity benefit record is now the Primary income source
	Issue a revised tax code see step 9 Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205
9.	View the IABD Landing screen
	Remove the Incapacity Benefit from the TAXABLE SOCIAL SECURITY BENEFITS screen using the IABD screen see PAYE130075
	Enter the individuals Employment Estimated Earnings for Incapacity Benefit as 1, see PAYE130045 and select [Save]
	Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]
	From the EDIT EMPLOYMENT ALLOCATION issue the emergency code on a week 1 / month 1 basis (This text has been withheld because of exemptions in the Freedom of Information Act 2000), see PAYE13115 and [Submit] to issue the revised tax code
	Update the CONTACT HISTORY screen to show action taken

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If the latest source commenced after incapacity benefit

10.

Review EBS notes (This text has been withheld because of exemptions in the Freedom of Information Act 2000). Telephone one of the contacts names shown and ask them to telephone Tax Liaison Office (TLS) to determine whether IB has ceased

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

If IB has ceased

Request the total Incapacity Benefit received over the telephone

From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted, using details shown on the form

Set creation source as P46(IB)

Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Show job title as Incapacity Benefit

Potentially cease the incapacity benefit record, select [Save]

Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter Incapacity Benefit leaving details using the SEES NOTES PASTER for coding Incapacity Benefit

Review the CY tax code, see step 11

Notes:

Incapacity Benefit cannot be coded unless a secondary employment is held for Incapacity Benefit in that year

Before issuing a revised code consider the individual's employment history and the previous tax codes operated during the year, see PAYE61205

11.

View the IABD Landing screen

Enter the leaving Incapacity Benefit details into the TAXABLE SOCIAL SECURITY BENEFITS screen, select [Save] and see PAYE130075

Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]

Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115 and [Submit] to issue the revised tax code(s)

Ensure that you amend the figure of Incapacity Benefit in the TAXABLE SOCIAL SECURITY BENEFITS screen to ‘0’ in CY+1 IABD Landing

Scrap P46(IB)

If IB is still live or your office is not listed as a contact point for DWP

Go to step 5 and review from the first bullet

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No live employment record held

12.	From the EMPLOYMENT SUMMARY screen press the [Insert] button so a primary record for incapacity benefit can be inserted
	Use the INSERT EMPLOYMENT DETAILS screen to create a primary record for Incapacity Benefit, using details shown on the form
	Set creation source as P46(IB)
	Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
	Show job title as Incapacity Benefit, select [Save]
	Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the Incapacity Benefit reward using the SEES Notes Paster for coding Incapacity Benefit
	Enter the individuals Employment Estimated Earnings for Incapacity benefit, see PAYE130045 and select [Save]
	Issue the tax code (This text has been withheld because of exemptions in the Freedom of Information Act 2000) if it is not already in operation see PAYE61205
	Scrap the P46(IB)

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Live JSA case

13.	If a live JSA record is held on the employment summary and the date of commencement is before Incapacity Benefit commenced
	Select the Edit Record icon to the right of the JSA record on the EMPLOYMENT SUMMARY screen
	Use the EMPLOYMENT DETAILS screen to update the JSA record to show potentially ceased [Save]
	From the EMPLOYMENT SUMMARY screen press the [Insert] button so a primary record for incapacity benefit can be inserted
	Use the INSERT EMPLOYMENT DETAILS screen to create a primary record for Incapacity Benefit
	Set creation source as P46(IB)
	Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
	Show job title as Incapacity Benefit
	Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the Incapacity Benefit reward using the SEES NOTES PASTER for coding Incapacity Benefit
	Enter the individuals Employment Estimated Earnings for Incapacity benefit as 1, see PAYE130045 and select [Save]
	Issue emergency code on a week 1/ month 1 basis (This text has been withheld because of exemptions in the Freedom of Information Act 2000) if not already in operation see PAYE61205
	Scrap the P46(IB)
14.	If a live JSA record is held on the employment summary and the date of commencement is after Incapacity Benefit commenced
	Estimate the amount of Incapacity Benefit received using date Incapacity Benefit commenced to date JSA commenced
	From the EMPLOYMENT SUMMARY screen press the [Insert] button so a secondary record for incapacity benefit can be inserted
	Set creation source as P46(IB)
	Show PAYE reference (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
	Show job title as Incapacity Benefit
	Potentially cease the incapacity record, select [Save]
	Update the CONTACT HISTORY screen in accordance with PAYE105020 and enter the leaving Incapacity Benefit details using the SEES NOTES PASTER for coding Incapacity Benefit
	Issue a revised code, see step 15
	Note: Before issuing a revised code consider the individuals employment history and the previous tax codes operated during the year see PAYE61205
15.	View IABD screen
	Enter Incapacity Benefit into the TAXABLE SOCIAL SECURITY BENEFITS screen [Save] see PAYE130075
	[Submit] the IABD screen
	Review the TAX CODE DETAILS screen, see PAYE11130 and [Submit]
	Review the EDIT EMPLOYMENT ALLOCATION screen to consider the basis of operation for the tax code(s) to be issued, see PAYE13115 and [Submit] to issue the revised tax codes
	Scrap the P46(IB)

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Abroad

16.	If individual's address is abroad and a live period of income is traced
	Go to step 5 and review from the first bullet

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No trace of individual’s record

17.	If a record cannot be traced for the individual see PAYE120015
	Scrap the P46(IB)

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