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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Debt and return pursuit: PAYE: Regulation 72 (5) Income Tax (Pay As You Earn) Regulations 2003: initial review of cases: PAYE Errors Unit (PEU) registration procedure

Receipt of cases

On receipt of a case a check should be made to ensure it includes:

  • a calculation of the PAYE liability for each employee
  • the employer’s request for a direction and explanation regarding the error
  • details of the employer’s P35 or final FPS/EYU
  • a memo and relevant correspondence to explain why the case has been sent.

Submitted cases - No request for direction given by the employer

If the case does not contain a notice of request for direction by the employer it should be sent back to the submitting office and not considered at that point.

Although HMRC has the power to issue a direction under R72(5) without the employer’s request for direction, the employee would be likely to appeal any direction based on HMRC not being provided with an explanation or the knowledge of the facts.

If the case has the correct details:

  • record the details on a database
  • prepare a C488 file
  • send an acknowledgement to the submitting office and request they BF the case for two months.

The following will help in building up a picture of the employer’s operation of PAYE.

  • NPS - this provides details of an employee’s coding, employment and pay.
  • e-Services filestore or NIRS2 for P14 and P35 details.
  • Employer Compliance System (ECS) for details of any HMRC visits and recoveries.
  • Integrated Debt Management System (IDMS) or ETMP may contain relevant information.
  • Self Assessment (SA) - this will provide details of reported Employment History / SA notes.
  • Any other system with relevant information.
  • Previous requests for direction from the employer.

When the C488 file has been prepared with any printouts and the case papers the database can be updated to ‘case ready for caseworker’.