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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE RTI: submissions and charges: advances

When an employer needs to make a tax refund or pay out any statutory payments to employees, but has insufficient deductions available to cover them, they can claim for an advance of funding from HMRC to cover the balance. When claiming the employer must specify what type of payment the advance relates to and the period it covers. Once the claim has been authorised by the Banking Team, payment of the advance will be made to the employer and a charge created on the employer’s record.

The way that advances are treated on ETMP is different to how they were dealt with on BROCS. BROCS shows the advance as a minus ‘PAD’ (PAYE Advance) posting. ETMP creates separate charges and credits for the advance and they are shown as ‘In Year Advance Charge (DnPyt)’.

Each advance paid to the customer will show as a credit on ETMP with a clearing reason of ‘outgoing payment’.

The due date for the advance charge depends on the period to which the advance relates. If the advance:

  • relates to one or more tax months within one tax year only, the due date will be the 22nd of the month following the end of the period covered by the advance
  • crosses two tax years, Corporate Finance will create two ‘down payment’ charges; from the:
    • start date of the request to 5 April, the due date will be the 22nd April following the end of the tax year
    • 6 April to the end of the period covered by the advance, the due date will be the 22nd of the month following the end of the period covered by the advance.

Prior to 25 July 2015, any claim crossing over two tax years will show as a single debt charge. Cross-year claims after this date will appear as separate charges.

The advance charge is cleared by any tax refunds and/or statutory payments contained in the FPS and EPS submissions for the period specified in the claim.

ETMP reviews the advance charge immediately after the due date and, where the employer has failed to account for the full amount of the advance, it sends any outstanding balance to IDMS.

IDMS in-year RTI advance work items

IDMS creates an In Year Advance work item where any uncleared advance amount remains on ETMP.

The work item shows an amount in the Tax field only. You can see the amount on the View Work Item screen.

The reference for an In Year RTI Advance work item is made up of a reference number and ASN like “123 P 1234567 YYYYAn MM” where:

  • 123 P1234567 is the Accounts Office reference
  • YYYY is the tax year
  • A represents advance
  • n is the sequential number given to any advance and underpayment work items created for the tax year; in other words, n = 1 for the first, 2 for the second and so on
  • MM is the monthly instalment and ranges from 01-12.