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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: PAYE: e-payment: default process - overview

Automatic issue of default notices by BROCS

Around the 28th of every month BROCS reviews large employer records to determine whether default has occurred. BROCS checks each large employer’s payment posting type for the month and its EDP and automatically issues a default notice to every large employer where it identifies a late payment or no payment.

This assumes that by not making payment, or by making payment later than the 22nd, the employer is in default of all their monthly duty types (PAYE, NIC, Student Loan Deductions and deductions from sub-contractors).

Where an employer advises that this is not the case, treat it as an appeal and calculate surcharge manually (see DMBM521200).

Default signal

Where the default notice has been issued automatically by BROCS the ‘Default’ signal will be automatically set against the month affected on BROCS, VIEW TAXPAYER (VTP) format 9, Designatory Data (DG), detailing the month(s) where default has occurred.

The following are new BROCS history codes on VIEWTAXPAYER (VTP) format 5, Actions (A):

DEFAULT - Default signal set

CANDEFLT - Default signal unset.

Segmentation and Default appeal signals

Default notices continue to be issued irrespective of whether the ‘segmentation appeal’ signal is set.

Default appeal signal

A ‘default appeal’ signal was introduced on BROCS in April 2005. Previously staff made a clerical note to RECORD ACTION HISTORY (CNA NA).

When set the ‘default appeal’ signal does not inhibit the automatic issue of the default notice where further default occurs.

Default count

In order to monitor employer compliance with the new regime and to enable surcharge to be calculated correctly, BROCS displays a ‘current defaults’ count.

The ‘current defaults’ count is the aggregated default count across all the deduction years that make up the current surcharge period.

To view this use VIEW TAXPAYER (VTP) format 8, General Designatory Data (DG).

IDMS shows the ‘current defaults’ count in ‘Default Count’ field in DESIGNATORY DATA, DETAILS TAB.

Where the ‘segmentation appeal’ signal is set on BROCS for a large employer the presence of this signal will not affect the performance of the default count in any way.

PAYE schemes where default notice is not issued automatically

Default notices are not issued automatically where the PAYE scheme is

  • secure and sensitive
  • Welsh language
  • deceased
  • insolvency or
  • quarterly payment.

PD Collection, the Welsh Unit and the DMEU receive a printed list of ’secure and sensitive’, ‘Welsh language’ and ‘quarterly payment’ cases respectively to enable them to issue a manual version of the default notice.

Default signal

Where the default notice is issued manually the default signal is set clerically using BROCS function AMEND PAYMENT DEFAULT SIGNAL (AME).

Default appeal signal

When set the ‘default appeal’ signal does not inhibit the automatic issue of the default notice where further default occurs.

Payment review lists

BROCS provides DMEU with review lists of large employers who have

  • paid less than is expected each month
  • made multiple In Year PAYE/NIC payments per month and 1 or more of these is/are late or
  • paid their In Year PAYE/NIC payments irregularly and have missed paying at least one month.