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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: P35 omissions and PAYE reconciliations (up to and including 2012-13) - correct amount of tax and NIC deducted but not paid in full

Before you follow the guidance on this page you must read COG915600 and COG915601 which provide important background information.

If the employer has deducted the correct amount of tax and NIC but has not paid the full amount and you have not identified any other liabilities, you should ask the employer to submit a supplementary return (P35 and P14s) for all the omitted tax and NIC.

A supplementary does not displace the original return and is the preferred method of providing the information required to reconcile the deductions and payments the employer has made in accordance with the PAYE regulations and for HMRC to allocate tax and NIC to individual employee’s records.

Almost all employers are now required to file their employer’s annual return online. Unless the employer is exempt from filing online you should ask them to send the supplementary P35 and P14s electronically. To ensure that the omitted tax and NIC are added to the amounts returned on the original P35, you should advise the employer to send the supplementary return as an amendment to the original return.

Note - guidance on how to send a supplementary return online can be found on page 15 of CWG2(2012).

If exceptionally the employer is unable to send the supplementary return online HMRC can process paper returns (P35 and P14s) but this is a less efficient process so you should make every effort to encourage the employer to file the supplementary return online.

If however, paper returns are required you should

You should ask the employer to send the completed returns to you and upon receipt you should send them to Employers Office for Processing to the address below

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If the employer is unable or unwilling to provide a supplementary return, you should invite them to sign the attached Letter of Offer - P35 Omissions (Word 34KB) for the total tax and NIC omitted from the P35 (including the amounts already paid). If they agree to do so you should reallocate the payments held on BROCS to SAFE using the P565 procedure explained at COG915097.

If the employer is unwilling to provide a supplementary return or sign a Letter of Offer then you will have to issue a regulation 80 determination and section 8 decision for the unpaid tax and NIC. You will also have to raise formal penalty determinations or assessments where appropriate.

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Note: A pro forma return to reconcile the tax and NIC already paid should only be used where the employer is unwilling to provide a supplementary return or sign a Letter of Offer which includes both the unpaid and paid tax and NIC left off the P35.

Note: You should wait for the supplementary/pro forma return to be processed before scoring compliance revenue in ECS/Caseflow.