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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: compliance revenue recording: PAYE settlement agreement

Annual reviews PSAs by Specialist teams

Where as part of the annual PSA checking process, you identify an error in the calculation which results in additional liabilities being recovered then the case should be registered in Caseflow as

  • Compliance check 1 - Other compliance check
  • Inaccuracy Category - PSA failed.

The amounts to be scored is

  • the additional tax/NIC included in the PSA settlement
  • Current Year Adjustment
  • Future Revenue Benefit, if appropriate.

Failure to enter into a PSA

Where an employer has been issued with a P626 contract and covering letter, which can be found in SEES, and subsequently fail to return the signed contract by the statutory deadline and also fail to return relevant items on P11D and/or P11D(b), you should

  • register the case as a full or aspect compliance check depending on whether there are other risks
  • recover any amounts due by contract settlement
  • calculate any Current year adjustment
  • consider Future Revenue Benefit where appropriate see COG915640 
  • consider behaviours and penalties
  • make sure that any compliance revenue is recorded against the correct recovery method and inaccuracy code.

Request for a new PSA

Where an employer wishes to enter into a PSA and it is evident that there are liabilities for earlier years you should

  • register the case as an

    • Full or Aspect Compliance Check in LC
    • a partial review in LB
  • request a full disclosure of all omissions
  • settle all previous years by contract settlement.

The amounts to be included as scored compliance revenue is

  • amounts of tax, NIC, interest and penalties (unless suspended) included within the contract settlement.

Where repayment of a PSA is requested see COG915800.

Where the employer has entered into contract but has not provided HMRC the calculation, you should

  • raise Regulation 110 Determinations based on previous years PSA and
  • register the case in Caseflow as Compliance check 1 - Other compliance check using the correct PSA Inaccuracy category
  • record the amount included in the R110 or, where an appeal is received, the amended figure after end of 30 days appeal period.

Note: Current year adjustment and Future Revenue Benefit is not appropriate in this instance.