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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: compliance revenue recording: failure to submit returns - no scheme

An employer is considered to have no scheme where

  • a pseudo scheme has been opened by RIS to register the case on Caseflow or
  • the scheme has been permanently cancelled or
  • for any year where the scheme has been cancelled one year only (COYO).

An employer who has no scheme may have

  • failed to operate PAYE, CIS and/or NICs
  • operated PAYE, CIS and/or NICs but not made a return to us.

You should

  • calculate and pursue the underpayment for earlier years and/or tax periods
  • calculate and pursue interest
  • consider behaviours and penalties (see note)
  • consider the most appropriate method of recovery COG915540 - Recovery Methods
  • calculate any current year underpayment refer the current year underpayment to DMB along with any payment collected
  • record the full amount of the underpayment, interest and penalties for earlier years on Caseflow
  • record the amount of the current year underpayment referred to DMB on Caseflow as ‘Future Revenue Benefit’ (see COG915640)
  • consider and record Future Revenue Benefit if appropriate (see COG915640).

When the employer is continuing and

* a pseudo scheme has been opened by RIS to register the case on Caseflow  
     
  or
* the scheme has been permanently cancelled or 
* for any year where the scheme has been cancelled one year only (COYO).

You should make sure that a PAYE scheme is opened, the date that a scheme is opened (Date Scheme Opened (Word 26KB)) will depend on the method of recovery.

To request a new scheme send all the relevant information via an email to NIC&EO, Emp Office Compliance mailbox (PT Operations NIC&EO) remembering to include ‘Scheme set up’ in the subject heading.

Note: Penalties for failure to make an EOY return are normally issued automatically by ECS. You should pursue (by contract settlement where possible) and score such penalties where it has been necessary to

  • open a new scheme
  • reopen a permanently cancelled scheme
  • reopen a scheme that has been cancelled one year , or
  • in any other circumstances in which an automatic penalty has not been charged.

Where it is appropriate to pursue such penalties you should

  • follow the guidance at COG914045 - First 12 months of lateness and COG914050 - Over 12 months of lateness.

Where penalties have been included in the settlement Employer Office should be notified to prevent the issue of duplicate action. Where the employer has ceased and penalties have not been included in the contract settlement or a contract settlement cannot be agreed and formal route is being followed you must ensure that a scheme is open for the relevant years to ensure that the fixed penalties are issued via ECS, see Date Scheme opened (Word 26KB).