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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: PAYE: cessation, cancellation and Cancelled One Year Only (COYO): cancellations

Full scheme cancellation

Where you establish that a scheme either:

  • is not required because the business has never employed any employees or subcontractors
  • was set up unnecessarily
  • is a duplicate record following contact from both the employer and agent

you will need to arrange with Employer Office for the scheme to be cancelled.

Where, exceptionally, there is money on the BROCS or the ETMP record you should establish what the payment was for and make the appropriate arrangements to reallocate to the correct year, scheme or head of duty (such as VAT, CT and so on) record. See DMBM522290.

Updating BROCS, ETMP and IDMS

To prevent any attempt to collect spurious debt, you will need to take certain actions. You should:

  • change the status of the BROCS record for the year(s) to WWTD
  • issue form P212 to PAYE Employer Office
  • note the form that the record has been made WWTD and that the PAYE element should be cancelled and in the case of XP or PSC schemes to cease the CIS element. (Employer office will notify CIS office)
  • note BROCS that a P212 issued and the reason
  • note IDMS work item(s) that a P212 was issued and the reason
  • ensure no payments are held on any year to be cancelled; if payments are held, reallocate as appropriate
  • where there is an ETMP record, set the Period of Inactivity for three months for any future months, reverse any specified charges to nil and create a nil Tax Assessment to apply the change
  • manually close any RTI return work items on IDMS
  • update ETMP notes.

In the case of PSC or XP schemes only, follow the sub contractor only section of the guidance at DMBM524370.

The IDMS work item(s) will close the day after the status on BROCS has been changed to WWTD or the specified charge has been reversed on ETMP.

If there is an IDMS PAYE late-filing penalty work item, you should:

  • note IDMS Action History that scheme is to be cancelled
  • set an appropriate BF date
  • send an eform to Customer Operations requesting that the penalty is cancelled.

Part scheme cancellation

Where the scheme is a PSC scheme with subcontractors but has never had any employees (or vice versa) you will need to arrange for the scheme to be amended. You should:

  • not make the case WWTD
  • either follow the normal pursuit procedures:

    • for the CIS returns and debt (PAYE cancelled), (DMBM524500)
    • at for employer returns and debt (CIS cancelled) (DMBM520000)
  • issue the P212 to PAYE Employer Office and note that the status of the scheme needs to be changed to either XP (subcontractors only) or P (employees only). Subsequent year’s schemes will continue as normal under the correct identifier (P or XP)
  • note BROCS that a P212 has been issued and the reason
  • note IDMS that a P212 has been issued and the reason
  • note ETMP of the scheme type change.

Refer to DMSS5361 for further information.