PAYE80033 - PAYE operation: review of claims and deductions: loan (Action Guide)

Where a letter or form P810 is received showing an entry for Loan Interest follow steps 1 - 7 below, as appropriate. This guide is presented as follows.

Initial action Steps 1 - 3
Reply received Steps 4 - 7

Initial action

1. Write to the customer and ask for evidence of and reason for the loan in all cases. Explain to the customer that the information is needed to support the claim and if we receive no reply the claim will not be allowed
2. Make a Contact History note to record the request for evidence to support the claim
3. Do not amend the code

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Reply received

4. If you are satisfied with the information provided
 
  • Review liability for CY-1
 
    • If a tax calculation is required include the customer service message ‘P810 claim agreed as’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘Loan claim agreed as’
 
    • If a tax calculation is not required, write to the customer and thank them for their co-operation and advise them that a calculation will not be issued
 
  • Amend the CY / CY+1 codes
 
  • Make a note in Contact History ‘P810 claim agreed as’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘Loan claim agreed as’
5. If you disagree with the information provided
 
  • Write to the customer and advise them
 
    • Of the Loan relief due (include an explanation to show how you arrived at the amount) and your intention to issue an informal calculation for CY-1 and to amend the CY coding
 
And that
 
    • These will be issued in 30 days unless you hear from them further. You should also advise the customer that if they disagree, it will be necessary to issue a tax return. HMRC may then consider opening an enquiry into the completed return to challenge the figures disagreed with. If we do that they will be able to appeal against our conclusions and any additional tax that became due
 
 
  • Make a note in Contact History ‘P810 claim not allowed / revised amount’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘Loan not agreed / revised amount’
6. If the customer does not respond by the BF date, assume agreement and
 
  • Issue an informal calculation for CY-1
 
  • Amend the CY / CY+1 codes
 
  • Calculate the tax adjustment in favour of HMRC or the customer and record this for inclusion on the monthly LOMR report ‘Claims / Non SA Enquiries’
7. If the customer disagrees
 
  • Write to customer to explain that a Self Assessment return will be issued as this gives the customer the avenue to appeal
 
  • Set up the case in ITSA (or reactivate any dormant ITSA record) and issue a tax return for CY-1
 
  • Make a note in Contact History ‘Non return - P810 Loan query’ , or where the claim was received in a letter ‘Non return - Loan query’ and note action taken
 
  • Do not amend the code

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