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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: compliance revenue recording: submission of supplementary returns

Although a supplementary return has no basis in statute, it is widely and often used to rectify errors/omissions on the original return.

There is only one return and that is the original submitted by the employer/contractor.

This applies to other statutory returns such as

  • P11D
  • P11D(b)
  • CIS36
  • CIS300

Where during the course of your enquiries you find that an

  • incorrect P35 (up to and including 2012-13) has been submitted you should follow the guidance at COG915601
  • incorrect Full Payment Submission (FPS) (from 6 April 2013) has been submitted you should follow the guidance at COG904250 (How to correct a current year inaccuracy).

You must not encourage the submission of a supplementary return to correct errors unless the employer has deducted the relevant tax and NIC but failed to include all the deductions on their P35.

In such cases a supplementary return (P35 and P14s) is the preferred method of accounting for the omitted deductions as it will automatically update individual employee’s records with the tax and NIC the employer deducted in accordance with the relevant PAYE and NIC regulations. If you obtain a supplementary return you should also attempt to secure payment of any unpaid tax and NIC.

Note: You should only seek to obtain a supplementary return for tax and NIC the employer has actually deducted.

Where during the course of your enquiries you find that a supplementary return has already been submitted and accepted you should establish whether the original return was incorrect due to the employers/contractors behaviour being careless or deliberate and consider a penalty for the submission of an incorrect original return.

The basis of this will be the amount of tax and/or NIC entered on the supplementary return.

The amount of the penalty can be scored as compliance revenue. In this respect you will need to

  • recover the penalty either by contract settlement or formal assessment, suspending if appropriate.

Note: You should wait for the supplementary/pro formareturn to be processed beforescoring compliance revenue in Caseflow.

Note: Any duty paid and accounted for when the supplementary return was processed cannot be scored.