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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE: introduction to PAYE: annual returns: return processing

The way a return is processed depends upon how it was submitted.

Paper returns (complete or P35 only)

There are two main stages to processing a return - logging and capturing.

Logging a return

When a paper return is received, Customer Operations offices or DMB for in-year cessation returns will:

  • apply the QS1 check to see that it is in an acceptable format
  • return failed returns to the employer
  • ‘log’ receipt of the return on EBS using function RECORD RETURN RECEIPT.

After logging:

  • EBS will send the date of return receipt to BROCS
  • BROCS will show a status of ‘unconfirmed’ against the return.

At the end of the tax year, DMB should pass cessation returns to Customer Operations for capturing.

Capturing a return

Customer Operations will capture returns onto EBS. EBS sends:

  • BROCS the Tax, NIC, Student Loan figures from the return to create an end of year charge (P228). The return status then changes from ‘unconfirmed’ to ‘Reconciled’ when passing ChRIS (Channel Routing Interface System) QS2 and QS3 checks
  • ChRIS details from the return to apply QS2 and QS3 checks. Returns that fail are referred to CEPT for investigation and correction.

Impact on BROCS and IDMS work items of logging and capturing paper returns

BROCS/IDMS work item Return Logged - work item Return Captured - work item
In year Remains open Closes
Return Closes - made WWTD (or stays LA if cessation case). N/A

Magnetic media returns

Employers choosing this submission method can only submit their P14s this way; their P35 has to be submitted by paper or online. The P14s are received by ChRIS and treated as a part return; if no P35 is submitted within 30 days CEPT will investigate.

Online returns

Internet submissions

Internet returns are initially received at the Government Gateway. From there, they are passed to ChRIS. ChRIS supports the electronic filing of employer annual returns in full or in parts. All return information must pass through ChRIS which will record return receipt details, capture end-of-year details and delete end-of-year details.

It will also record whether the return was received in full or in parts and which method of submission is used (paper, magnetic media or electronic) and through which channel (EDI or internet). ERSS applies QS1/QS2 checks to all returns (part and complete) and QS3 checks to all complete returns only.

Any return (or part of) failing these checks is sent back online to the submitter with full details of the failures.

Electronic Data Interface (EDI) submissions

EDI returns are initially received by EDI Transfer Processing (EDI-TP) where QS1/QS2 checks are applied. Any failures are notified to the submitter, but the data is retained within EDI-TP. Submissions that pass are referred to ChRIS.

Channel Routing Interface System (ChRIS)

ERIC was the computer component introduced in April 2005 to support the electronic filing of employer annual returns. ChRIS superseded ERIC in 2010-11.

Failed returns

Any complete return that has been submitted but later failed is not shown on BROCS or EBS. For further information, see PAYE41045 and PAYE41015.