Working Together - Register of Issues - Pay As You Earn Archived Issues

 

1. Self Assessment
Live or Archived
6. New Tax Credits
Live or Archived or Q&A
11. National Minimum Wage
Live or Archived
2. Electronic Business
Live or Archived

7. Capital Gains Tax
Live or Archived
12. Personal Services Companies
Live or Archived
3. SA - Statements of Account
Live or Archived
8. Corporation Tax Self Assessment
Live or Archived
13. Trusts
Live or Archived
4. SA Payments
Live or Archived
9. Pay As You Earn
Live
14. Other Issues
Live or Archived
5. SA Return
Live or Archived
10. National Insurance Contributions
Live or Archived

 

9. Pay As You Earn

     
Date Archived
  9.1 - PAYE and NIC compliance staff - joint visits proposed to reduce number of visits to businesses Cleared
15/05/2003
  9.2 - Difficulties in transferring surplus MCA between spouses Cleared
15/05/2003
  9.3 - Where new 64-8 completed, will agents now be notified of Employer Compliance visits? Cleared
15/05/2003
  9.4 - Bringing the payment of Retirement Annuity premiums within PAYE, in the same way as Personal Pensions. Cleared
15/05/2003
  9.5 - Flowers for staff who are ill Cleared
15/05/2003
  9.6 - Bad timing of issue of notices of coding, end of year forms, P35's etc. (amended) Cleared
15/05/2003
  9.7 - Issue of new style forms P14/P60 without prior notification or requisition form Cleared
15/05/2003
  9.8 - Delay in obtaining new style forms P14 from Employer's Helpline resulting in penalties for late receipt and inappropriate reminders for forms P35 Cleared
15/05/2003
  9.9 - Difficulty in contacting central PAYE setting up system helpline (amended) Cleared
15/05/2003
  9.10 - Notices of coding - copy notices not sent to agents Cleared
15/05/2003
  9.11 - Underpayment coded out differs from amount in tax collection Cleared
15/05/2003
  9.12 - Underpayment coded out against taxpayer's wishes Cleared
15/05/2003
  9.13 - Business motoring record keeping problems. Cleared
15/05/2003
  9.14 - Use of Inland Revenue Authorised Mileage Rates when completing P11D Cleared
15/05/2003
  9.15 - Circumstances in which dispensations are available for one man companies (amended) Cleared
15/05/2003
  9.16 - Estimated PAYE underpayments from new car benefits. Cleared
15/05/2003
  9.18 - PAYE tax entered at box 3.98 (Tax deducted from trading income) in the Self Employment page and 4.75A in the Partnership page (3.120 or 4.75A for 1999/2000) Cleared
15/05/2003
  9.19 - The P11 working sheet is too big and complicated Cleared
15/05/2003
  9.20 - : Internet service for PAYE - no facility to transfer data electronically from employer's payroll. Cleared
15/05/2003
  9.21 - Agents currently have to telephone the tax office to ask how an underpayment of tax in a client's code is made up. Cleared
15/05/2003
  9.22 - Concern about inconsistency in the handling of requests for advice on termination payments from employers and their agents Cleared
15/05/2003
  9.23 - Under Area Management re-organisation, agents are receiving notification of change of Revenue Office address for each client in separate envelopes. Cleared
15/05/2003
 
Issue 9.1 Pay As You Earn: PAYE and NIC compliance staff - joint visits proposed to reduce number of visits to businesses
Current Position Joint visits are now taking place
Next Action CLEARED
 
Issue 9.2 Pay As You Earn: Difficulties in transferring surplus Married Couple's Allowance between spouses
Current Position We are unaware of specific difficulties. Please let the Working Together Team have examples of any difficulties.
Next Action CLEARED
 
Issue 9.3 Pay As You Earn: Where new 64-8 completed, will agents now be notified of Employer Compliance visits?
Current Position The Revenue is looking to change its guidance to staff to make it clear that the agents should be contacted prior to an Employer Compliance visit.
Next Action CLEARED
 
Issue 9.4 Pay As You Earn: Bringing the payment of Retirement Annuity pensions within PAYE, in the same way as Personal Pensions.
Current Position This would require a change in tax policy and legislation and is therefore a matter for Ministers and Parliament.
Next Action CLEARED
 
Issue 9.5 Pay As You Earn: Flowers for staff who are ill
Current Position Additional guidance on treatment of benefits that are trivial in nature was issued to network staff in February 2000. Staff are encouraged to exercise discretion and a sense of proportion.
Next Action CLEARED

 
Issue 9.6 Pay As You Earn: Bad timing of issue of notices of coding, end of year forms, P35's etc.
Current Position There is no flexibility in the dates of issue of Notices of Coding, P35s or CIS36 because constraints of time, equipment and staffing mean that it is not feasible to significantly alter the date of issue of these forms. . See article in Working Together issue 10.
Next Action CLEARED
 
Issue 9.7 Pay As You Earn: Issue of new style forms P14/P60 without prior notification or requisition form
Current Position This was a particular problem connected with the provision of employers' PAYE stationery in 2001. Systems have been put in place to ensure that there is no repetition of these problems.
Next Action CLEARED
 
Issue 9.8 Pay As You Earn: Delay in obtaining new style 1999/2000 forms P14 from Employer's Helpline resulting in penalties for late receipt and inappropriate reminders for forms P35
Current Position Additional guidance to staff re further period of grace. All versions of 1999/2000 P14s now in stock and being despatched by 1st class post.
Next Action CLEARED

 
Issue 9.9 Pay As You Earn: Difficulty in contacting central PAYE setting up system Helpline
Current Position Responsibility for the running of all Revenue Helplines, including the NESI Helplines, has now been taken over by a new Executive Office - Inland Revenue Contact Centres. The intention is to multi-skill operators and where this is not possible to make resources available across all sites so that peaks and troughs of work can be planned for and managed. This should result in a much-improved level of service than has been experienced in the past.
Next Action CLEARED

 
Issue 9.10 Pay As You Earn: Notices of coding - copy notices not sent to agents
Current Position Working Together issue 8 included an article Copy Coding Notices for Agents explaining that copies of PAYE coding Notices (P2) could be sent to agents from April 2002. This will happen automatically for SA taxpayers with agents. For non SA taxpayers agents need to contact the client's Tax Office to arrange for copies to be sent in future.
Next Action CLEARED
 
Issue 9.11 Pay As You Earn: Underpayment coded out differs from amount in Self Assessment tax collection
Current Position Guidance on this issue has been issued to local offices.
Next Action CLEARED
 
Issue 9.12 Pay As You Earn: Underpayment coded out against taxpayer's wishes
Current Position Guidance on this issue has been issued to local Offices.
Next Action CLEARED
 
Issue 9.13 Pay As You Earn: Business motoring record keeping problems particularly difficulty in defining a business mile, lack of immediate challenge by Inland Revenue to company car list price as shown on form P46 (Car), the employer notification of company car changes during the tax year.
Current Position Journeys that count as business travel for tax relief are those the employee has to make in the course of their job or those they make to or from a place they have to attend in order to do their job. (Unless the journey is practically the same as their ordinary commuting journey). No tax relief is available for ordinary commuting or private travel.

Detailed guidance on the types of journeys that count as business journeys is contained in Booklet 490, 'Employee Travel - A Tax and NIC Guide for Employers'.

Information provided by employers on P46 (Car) is used primarily for a clerical exercise to update employees' PAYE coding notices as necessary during the tax year. It is normally accepted at face value without carrying out further checks. In addition the P46 (Car)(2001) includes information relevant to employees' tax codes for the new car benefits system that begins on 6 April 2002.

Next Action CLEARED
 
Issue 9.14 Pay As You Earn: Obligation to report expenses paid for business use of employee's own car based on Inland Revenue Authorised Mileage Rates when completing P11D
Current Position From 2002/2003, a new statutory system of tax and National Insurance Contributions (NICs) free mileage rates for business journeys in employee's own vehicles was introduced. The current administrative system of authorised mileage rates geared to a car's engine size has been replaced by a single rate for all cars and vans. For business travel this will be the maximum amount an employer will be able to pay per mile without generating a tax/NICs charge.

Employers no longer need to report such payments for business travel on form P11D from 2002/2003.

Subject to dispensation being held, for 2000/2001 and 2001/2002 P11D returns, employer reporting obligations remain unchanged for car expenses payments based on authorised mileage rates. See article in Working Together issue 5.

Next Action CLEARED
 
Issue 9.15 Pay As You Earn: Circumstances in which dispensations are available for one-person companies
Current Position

"Where a director/shareholders having free hand in deciding what they take as expenses it will not usually be appropriate to give a dispensation for them. This does not mean that expenses payments to director/shareholders can never be included in a dispensation. If the application for a dispensation is in respect of reimbursements to a controlling director of vouched expenditure necessarily incurred on travelling in the performance of his or her duties there is no reason why it should not be approved." (see Schedule E Manual SE30059). See article in Working Together issue 5.

We have also updated both our published leaflet on dispensations (IR69 Expenses payments and benefits in kind. How to save yourself work) and the guidance in the Schedule E manual (SE30059) as published under Open Government. These make it clear that a dispensation may be considered for controlling directors who decide their own expenses provided the expenditure is vouched by independent documentation. See Working Together issue 10.
Next Action CLEARED
 
Issue 9.16 Pay As You Earn: Estimated PAYE underpayments from new car benefits. Code out a full years' car benefit on a week 1/month 1 basis to ensure the taxpayer is paying the correct tax from the start of the company car benefit instead of the current arrangements of apportioning the benefit according to the number of days the car is available to the taxpayer to the end of the tax year
Current Position From April 2002, estimated PAYE underpayments will no longer be coded out automatically in SA cases. Instead, underpayments will be taken into account in the SA calculation for that tax year. See Working Together issue 9.

Although there is no change to the arrangements for non-SA taxpayers, the taxpayer/agent may still ask for a different treatment at the time that the benefit is first made available. See Working Together issue 10
Next Action CLEARED
 
Issue 9.18 Pay As You Earn:PAYE tax entered at box 3.98 (Tax deducted from trading income) in the Self Employment page and 4.75A in the Partnership page (3.120 or 4.75A for 1999/2000)
Current Position PAYE tax should not be shown in box 3.98 or 4.75A. The notes on Self Employment, Page SEN10 clearly state that tax deducted under PAYE should not normally be included here, it should go on the Employment pages.
See article in Working Together issue 6.
Next Action CLEARED
 
Issue 9.19 Pay As You Earn: The P11 working sheet is too big and complicated
Current Position We recognise that the form P11 working sheet is on the large side. However the working sheet is determined by the number of columns required to cover Tax, NIC, SSP, SMP, Student Loan and Tax Credit in-year recording requirements.

The size and content of the form will remain unchanged for 2002-2003 but we are investigating what changes could be made from 2003-2004, particularly at what scope there is for reducing the amount on NIC-related information to be recorded.

Next Action CLEARED
 
Issue 9.20 Pay As You Earn: Internet service for PAYE - no facility to transfer data electronically from employer's payroll. The service is only worth using for small employers, as staff costs for manually entering the details would exceed the discount available.
Current Position The Revenue's own software enables you to complete and send PAYE forms and Returns to us online, but these forms are not specifically aimed at employers who already use a payroll software package. Electronic Business Unit works closely with commercial software developers to encourage and enable them to develop products to use with the service.

There are now a growing number of suppliers of payroll and/or accounting software packages who have now developed and successfully tested a product to use with the Internet service. The output from these payroll packages can be sent over the Internet. The Software and Online Forms page on our website lists the suppliers who have successfully tested a product to use with the Internet service. www.inlandrevenue.gov.uk

Next Action CLEARED
 
Issue 9.21 Pay As You Earn: Agents currently have to telephone the tax office to ask how an underpayment of tax in a client's code is made up.
Current Position

Copies of PAYE coding notices (form P2) have been issued to agents since April 2002. Also from April 2002, estimated underpayments are no longer coded out automatically in SA cases (see the article in Working Together issue 9.
Next Action CLEARED
 
Issue 9.22 Pay As You Earn: There is concern about inconsistency in the handling of requests for advice on termination payments from employers and their agents. The Revenue wants to address this and develop a more consistent approach.
Current Position Working Together issue 9 included an article "Advice to employers and Agents on Termination Payments." Fresh guidance has been sent to Inland Revenue staff after reports from employers and accountants highlighted inconsistencies in the way we were dealing with enquiries on termination payments and benefits.
Next Action CLEARED

 
Issue 9.23 Pay As You Earn: Under Area Management re-organisation, agents are receiving notification of change of Revenue Office address for each client in separate envelopes.
Current Position

Unlike the Self Assessment system, the PAYE computer system is such that it cannot read the agent's reference. It looks only at the individual records.

Areas are told by Head Office to notify agents in advance of a reorganisation and to expect an increase in correspondence.
Next Action CLEARED
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