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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: settlement: direction under regulation 72F: action by caseworker - SA notation

In any case where an employment income query or re-categorisation of employment status might arise you should arrange for an SA note to be added to the record of each individual who might be affected.

Note: In High Net Worth Unit (HNWU) cases (COG915285 - Considering a Direction) the note will be entered by the HNWU Authorising Team based in Cardiff. This is because Local Compliance and LB are unable to be provided with access to the SA record of CPR taxpayers.

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

This note should read:

PAYE Reg 72F direction case - Note 1

‘Contact Compliance Officer in event of any amendment to SA Return or an overpayment relief claim under Schedule 1AB TMA 1970 amending self-employed profits or employment income, compliance reference, contact number and date’.

Processing staff identifying such cases will contact you and may provide the trigger for considering a Reg 72F direction.

When they do, you should

  • review the case as a matter of urgency to establish whether it is suitable for a direction to be raised. and
  • make sure that both the employer and employee are kept fully informed of your intended actions and progress made.

When the direction is raised you should make sure note 2 below is put on the record (and remove note 1 above if still present):

If following your enquires you consider a direction is not appropriate, you should

  • arrange to remove note 1.

PAYE Reg 72F direction case - Note 2

‘Tax and NIC paid on income formerly treated as Self Employment for yyyy-yyyy from……………………… (name of employer/payer) not to be repaid. No Repayment and PSE Signals set. Before taking any action refer to Officer name, ref, contact no.’

Repayments claimed for later years can be dealt with as normal.

Where the direction notice sent to an employee specifies the amount of tax directed you should specify the amount in Note 2 as this will help Processing Teams when dealing with repayment claims.

Where sampling has been used and the direction notice only specifies the employment in respect of which the relevant payment was received, if an employee

  • appeals against the direction
  • attempts to include tax the employer ought to have deducted as an adjustment under Regulation 185, or
  • makes an overpayment relief claim under Schedule 1AB TMA 1970 which includes an adjustment for a PAYE credit in relation to the relevant payment for which the direction was made

HMRC can issue a further direction notice specifying the amount actually paid by that employee.

You should also arrange to

  • set the No-repayment signal on the SA record
  • set PSE1 signal (for year immediately following re- categorisation) the SA record.

Note: To facilitate entry of these notes

  • access to the SA Clerical Processing Officer/Enquiry Officer role function and
  • access to SEES ‘notes paster’, which is available in Clerical Toolkit and the Investigation Toolkit,

has been arranged for compliance staff.

The path is

  • excel
  • SEES (Clerical (P) should be shown at the top of the page)
  • notes paster
  • processing
  • self assessment (click on - top left of page)
  • compliance
  • select the appropriate note
  • select the system to copy to (bottom of the screen)
  • select copy
  • the message should appear in the SA notes box on the screen underneath.

Processing staff guidance

Processing staff should follow the attached guidance (Word 27KB).