Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Glossary of terms

Glossary

A B C D E F G H I L M N O P R S T U V W X

A

Abroad

An address is not abroad if it is

  • Within the United Kingdom, Isle of Man or Channel Islands
  • One of HM Ships
  • With British Forces Abroad or an address with a British Forces Post Office (BFPO) number

Accounts Office

There are three sites where the work of Banking Operations is carried out

  • Cumbernauld
  • Shipley
    And
  • Newcastle

Banking Operations is responsible for

  • Day to day payment processing and accounting work from employers, contractors and SA taxpayers
  • Issuing assessments, demand notes and reminders
  • Updating and maintaining taxpayer records

Accounts Office reference

This is the reference used to identify each BROCS record. It includes

  • Your office number, consisting of three numeric characters (numbers) using where necessary leading zeros
  • The letter P
  • A check character
  • A register number which will be

    • Outside Scotland from one to six figures
    • In Scotland seven figures followed by the letter X

Additional complete return

Additional Complete shows that the return is

  • Supplementary to the original EOY return that was captured for that year
    And
  • A complete return

Additional EOY return

An additional End of Year (EOY) return is

  • Supplementary to an original EOY return that has been received for that year
  • And
  • Can be of the same return type. For example a P35

The amounts included on an additional return must not include the amounts shown on the original return received.

An Additional return arises for example

  • If details from a P14 were omitted from the original return
  • In the case of a PSC scheme if either return is captured after the other then the later return is deemed to be an ‘Additional Return’

Additional Part P35 return

Additional Part P35 shows that the return is

  • Supplementary to the original EOY return that was captured for that year
    And
  • A P35 on its own without any forms P14

Additional pay

Additional pay is an amount added to an employee’s ‘total pay to date’ on any pay day when a K code is used. It is used to collect extra tax due from employees who have untaxed income (such as state benefit) which cannot be fully covered by allowances.

Statutory Shared Parental PAY (ShPP)

Statutory Shared Parental Pay is available to

  • Fathers
  • A spouse or civil partner of the mother or adopter who satisfies the qualifying conditions for either Statutory Maternity Pay (SMP) / Maternity Allowance (MA) or Statutory Adoption Pay (SAP) and has returned to work before the end of their SMP, MA or SAP pay period

For those eligible parents, payments will be made through their salary. The employer can either recover

  • 92% of any payments made
    Or
  • 100% (plus compensation) if they qualify for Small Employers Relief (SER)

Address framework

The Address Framework provides a means of standardising the handling and storage of address information.

It holds a copy of the database used by the Post Office to hold details of all UK verified addresses known as the ‘Post Office Address File’ or ‘PAF’.

Function ADDRESS SEARCH is used to access the data on this Framework in order to search for and store addresses onto an employer record.

Agent

An agent is a person or group of persons appointed by an employer to act on their behalf.

Where an agent deals with and requires copies of all of the following correspondence then that agent’s details must be entered on the employer record

  • Operation of PAYE
  • Employer’s copies of coding notices
  • Payslips
  • Employer Pack
  • Employer annual returns
  • Regulation 80 Determinations
  • Late EOY return penalties and P11D penalties
  • General employer correspondence and other employer assessments

Notes:

  1. If you receive a form 64-8 (Authorising Your Agent) you must send a copy of the form together with SEES form 64-8 Stencil to the Central Agent Authorisation Team (CAAT) who will enter the details on to EBS and other systems
  2. We must have a signed FBI 2 authorisation before we can send information to agents using PAYE online for Employers - Internet. We can however receive information, on behalf of the employer from any agent or representative

Agent (for employer)

An agent is a person or group of persons appointed by an employer to act on their behalf.

An agent’s responsibilities to the employer may differ but could include

  • Receiving copies of determinations
  • Dealing with and issuing or sending correspondence
  • Running the payroll

ASN

The ASN or Assessing Sub number identifies the year on the Banking Operations record to which the annual return or charge relates.

The ASN consists of

  • The final two digits of the tax year
    Followed by
  • A sub-number, which will always be 01

For example the ASNs for

  • 2010-11 will be 1101
  • 2011-12 will be 1201

Top of page

B

BACS

BACS is an automated service operated by banks and building societies for clearing payments. It avoids the need for handling cheques or cash when making payment.

BACS payments are transferred electronically into the HMRC account with the Bank of England. The bank notifies Banking Operations of payments on magnetic tape.

Bank Giro

Bank Giro is a credit transfer system that enables payment to be made through a bank branch. Each payment is credited to an HMRC Bank Giro account with the Bank of England. The target bank account is indicated on the payslip. Each account is associated with one of the Banking Operations sites.

The Bank of England notifies the AO of the credits received each day in each Bank Giro account. The credits are notified mainly on magnetic tape but a small proportion is notified on paper.

Banking Operations

From 1 November 05 Banking Operations was established within the Debt Management & Banking business.

Banking Operations - Direct Taxes work includes the work of the former Accounting & Payments Service

  • Day to day payment processing and accounting work for employers, contractors and SA taxpayers
  • Issuing assessments, demand notes and reminders
  • Updating and maintaining taxpayer records

Bankruptcy

Bankruptcy (known as Award of Sequestration in Scotland) is a legal process for dealing with individuals, sole traders and certain partnerships that are unable or unwilling to pay their debts. Bankruptcy orders are made by the Courts following the presentation of a petition.

The equivalent legal process for a company is liquidation.

Batch process

A batch process is an automatic process that runs in the background, either immediately or overnight, following action taken on the computer record. It cannot be accessed on-line by an operator.

Batch processes are used, for example, to update taxpayer records with data supplied by external systems, to extract information and to produce output.

Better Management of Electronic Information

Better Management of Electronic Information (BMoEI) have established a range of tools including help-cards, folder structures and naming conventions aimed at improving electronic storage of information, using the existing IT tools.

From June 2006 most of the information formally stored in employer establishment files will be moved to the electronic file structure.

BROCS

Business Review Of the Collection Service is the Banking Operations computer system.

Each employer or contractor required to make a return (with the exception of DC cases where the taxpayer does not account for his own NIC) has a record held on this system.

Banking Operations use these records to

  • Make bulk issues of

    • Returns to employers and contractors near the tax year end
    • Reminders for returns and amounts outstanding
  • Keep a record of payments
  • Advise the Debt Management Office when to follow up outstanding returns
  • Advise the PAYE Employer Office of some amounts overpaid

Business Support Team

BSTs were introduced as an initiative to meet the Government’s commitment to reducing the burden on employers and businesses. Their primary aim was and still is to provide a free educational support service for new and small employers. It is important to ensure whilst speaking to employers in your day to day work that any employer can be referred to BSTs for help and assistance should this be deemed appropriate.

BSTs can offer

  • One to one visits
  • Payroll support service
  • Payroll health checks
  • Workshops

Top of page

C

Cancelled one year only

A scheme is cancelled for one year only (COYO) when for that year

  • No payments of earnings equivalent to or above the Lower Earnings Limit (LEL) were made to employees
  • No payments have been made to BROCS relating to the year of the return
  • No Tax Credits have been authorised or funding payments made to the employer

Central Agent Authorisation Team

The Central Agent Authorisation Team (CAAT), based at Longbenton, ensure that when a form 64-8 is received to appoint an agent to act on behalf of an employer or contractor the details are speedily recorded on to EBS and other systems.

Any form 64-8 received in the PAYE Employer Office should be promptly sent with SEES form 64-8 Stencil, using Tax Post, to CAAT at

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Central Exceptions Processing Team

The Central Exceptions Processing Team (CEPT) is located at NICO and processes return exceptions from ERIC.

Certification

Double Taxation.

A double taxation claim has to be stamped by the individual’s overseas country of residence for it to be accepted. This is known as certification.

CHAPS

CHAPS stands for Clearing House Automated Payment System. It is a facility offered by Banks for arranging same day payment and is normally used for paying larger amounts.

Money is transferred electronically into the HMRC account with the Bank of England. The Bank notifies Banking Operations of each payment on the day of receipt.

Cheque for cash

The cheque for cash (CFC) facility was withdrawn from 1 January2006. All offices will inform visitors to pay at the Post Office or a Bank.

Collection account year

The Collection Account Year is the period from

  • The last Friday in October to
  • The Thursday before the last Friday in October of the following calendar year (both days inclusive)

Companies holding CIS5 certificates

A Construction Tax Certificate (CIS5) permits the contractor to make payments to the company named on the certificate without deduction of Income Tax.

Company registration number

The Registrar of Companies allocates a Company Registration Number to a company that is incorporated or registered under the UK Companies Acts.

The Company Registration Number (CRN) is unique to that company and will be in one of the following formats

  • 8 numeric characters in the range 0-9
  • NI (where the company was registered in Northern Ireland) followed by 8 numeric characters in the range 0-9. For example, NI21345678
  • SC (where the company was registered in Scotland) followed by 8 numeric characters in the range 0-9. For example, SC21345678

Notes:

  1. No prefix is used for companies registered in England and Wales
  2. If the CRN has less than 8 numeric characters it must be prefixed with leading zeros. For example, 00345678

Company UTR

When a company record is set up the computer system allocates a 10 digit reference number. This is then the company reference throughout its life. It is known as the Unique Taxpayer Reference (UTR).

This same principle applies to allocating UTRs to individuals and partnerships.

Complete return

A complete return is one where the employer has submitted a P35 together with all expected forms P14.

If an employer intends to send the whole return by the paper channel, then the return must be submitted as a complete return and not in parts.

Consolidated position

This term refers to the overall net position of a monetary item having taken into account all previous End of Year returns captured for that employer record for a given year.

This figure is calculated by the computer and is situated to the left of the monetary field.

For all additional or correction returns each monetary item on the End of Year return will have two amounts on the CAPTURE EOY RETURN DETAILS ADDITIONAL / CORRECTION screen

  • The Net Adjustment amount
    And
  • The consolidated position

The following table shows an example of how the consolidated position is calculated for returns already captured

Return Figures

Consolidated Position

Original return showing total tax due of £100.00

£100.00

See note

Additional return showing a further £50.00 tax due

£150.00

Corrected return showing a figure of minus £10.00 tax

£140.00

Note: When capturing an original or pro-forma return there is only one monetary amount shown for each monetary item. That amount would be classed as both the net adjustment and consolidated position.

Contractor

The term contractor has a wide meaning and includes

  • Any person carrying on a business whose trading activities include construction operations (mainstream contractors)
  • Any local authority, development corporation or Commission for New Towns
  • The Housing Corporation, Housing for Wales, a housing trust, Scottish Homes and the Northern Ireland Housing Executive
  • Non-construction businesses (deemed contractors) which spend on average more than £1,000,000 a year on construction operations
  • A property developer or speculative builder, erecting and altering buildings in order to turn them in to financial account
  • A labour agency or staff bureau supplying workers to perform construction operations
  • A gang leader with gang members who are self employed

COP

COP (Computerisation of PAYE) is the computer system that

  • Holds (archived) records for PAYE taxpayers

Correction EOY return

A correction End of Year return is

For Tax Years 2004-05 and later

A correction to an earlier captured return or part return where an error was made in capturing the employer’s figures. (For example, only to adjust the capture details to match the P35).

Correction returns are not recorded as received before capture, and are not linked to a receipt record.

Where a P35 return is held at RSI1 on EBS and you capture a correction return, the correction will pass to the External Routing Interface Component (ERIC) and replace the return held at RSI1.

Where all P35 returns are held at RSI2 on EBS and you capture a correction return, the correction will not pass to ERIC and will add to the return held at RSI2.

For Tax Years 2003-04 and earlier

  • An amended return
    And
  • Must only be made where amendment to a previously submitted End of Year return is required

Under no circumstances must figures on the existing End of Year return be amended.

Correction returns are not recorded as received before capture, and are not linked to a receipt record.

Note: The capture of a correction return can be identified from the Return Receipt list box in the View EOY Return History screen. The entries which will identify a correction return are

  • A blank entry in the Return Type field
  • A blank entry in the Date Field
    And
  • CORRECTION in the Return Class field

CSL

CSL (Collection of Student Loans) is a system under which HMRC is responsible for collecting repayments of student loans from UK residents.

Top of page

D

Daily casual

A ‘daily casual’ is a worker

  • Taken for no more than one day
  • Paid off in cash by the end of the day
    And
  • There is no agreement for further work, even if further work may be expected

Data Centre

The addresses for both Data Centres are

Banking Operations Shipley

Banking Operations Cumbernauld

Media Library
Fujisu Operations
Shipley Data Centre
Shipley
Bradford
West Yorkshire
BD98 8AA

MTCI Section
Fujisu Operations
Cumbernauld Data Centre
St Mungos Road
Cumbernauld
Glasgow
G70 5TR

Telephone 03000 595244

Telephone 01236 783410

Data Protection (SAR) Unit

The Data Protection (SAR) Unit (DPU) is responsible for all aspects of processing subject access requests.

The DPU will

  • Monitor HMRC’s adherence to the 40-day legislative deadline
  • Issue the information retrieved in response to a SAR

Further information about registration procedures and subject access requests can be obtained from

Data Protection (SAR) Unit

IMS
Room BP4302
Benton Park View
Longbenton
Newcastle Upon Tyne
NE98 1ZZ

Telephone: 0191 2253098

Fax: 0191 2257575

DCNI Scheme type

A DCNI scheme type is appropriate when a simplified PAYE scheme is required to enable direct payments of National Insurance (NI only).

Collection of the deductions is quarterly during the year.

Debt Management & Banking (DMB)

Debt Management & Banking is a diverse business, which operates right across the United Kingdom. The service brings together IR and Customs and Excise functions. Banking Operations are based at Cumbernauld, Shipley, Newcastle, Southend, Liverpool and Greenock, while a network of offices in over 150 locations undertakes debt management activity.

The work of the Banking Operations offices includes

  • Day to day payment processing and accounting work for employers, contractors and SA taxpayers
  • Issuing assessments, demand notes and reminders
  • Updating and maintaining taxpayer records

Debt Management office

The term ‘Debt Management’ office describes an office that undertakes recovery activity work. It includes

  • Local Debt Management Offices
  • Enforcement & Insolvency Services (EIS)
  • Banking Operations Tracing Units
  • Banking Operations Review Unit
  • Banking Operations Public Department Collection

Debt Management Offices are responsible for

  • All local action necessary to secure payment and outstanding returns. This may be through the following methods

    • Face to face contact
      Or
    • Making contact by telephone
  • Taking distraint (poinding in Scotland) action or formal court proceedings to recover debts

These offices were formally known as Recovery Offices or Recovery Sections in Integrated Offices.

Deduction year

The deduction year is the same as the tax year, and covers the period 6 April in one year to 5 April in the following year.

Direct debit

Payment by Direct Debit (DD) involves a bank or building society customer providing a written instruction permitting regular payments to be collected by a specified payee.

A taxpayer using the DD facility sends the signed instruction to HMRC. Any DD instruction received in a local office is passed to Banking Operations. Banking Operations records receipt and passes the instruction to the bank or building society.

Collection of the regular payments and update of taxpayer records is initiated by Banking Operations.

Director

A director is a person who is, either on their own or with one or more associates, beneficial owner of, or able, directly or through the medium of other companies, or any other indirect means, to control not less than 20 per cent of the ordinary share capital of that company.

In other words a director is someone who either on their own or with their fellow directors is or are the major shareholder(s) and control(s) the running of that closed company.

District Record

District Record is a filing range where non file case taxpayer papers are kept for retrieval at a later date.

DLO

‘Dead Letter Office’ identifies an address that is no longer recognised as a valid postal address.

In other words the address no longer exists because, for example, the building has been demolished.

DLO will appear alongside the STATUS field where a DLO address has been retrieved from Function ADDRESS SEARCH and stored on the employer record.

DOME Scheme type

A DOME scheme type is appropriate for employers of personal or domestic employees who are paid a fixed wage to deduct tax on a non-cumulative basis.

In practice HMRC may also allow this ‘simplified deduction’ procedure to be used where an employee’s wages are variable and wages sometimes fall below the tax threshold, provided that all employees from whom tax and NIC will be deducted are personal and domestic employees of the employer.

In all cases the net taxable pay (after allowances) for each employee must not exceed £160 a week (£700 a month). When these limits are exceeded a DOME scheme is not appropriate and the employer record should be set up as a P Scheme.

Dormant

This term relates to a scheme when it is

  • A limited company that is inactive
    And / Or
  • Has no employees liable to PAYE and / or NIC

Double Taxation

Double Taxation is a term used when an individual or company is taxed in 2 countries, the country of residence and the country in which the income arises. In many of these cases, the company or individual can claim relief / exemption from tax in the country in which the income arises under the Double Taxation Agreement between the 2 countries.

DPGEN Scheme type

A DPGEN scheme type is appropriate when normal PAYE procedures are unsuitable and employees deduct Income Tax only for themselves.

This scheme type is appropriate for certain types of employees, office holders or individuals. They include

  • Roman Catholic Priests
  • Clergy of the Church of Ireland
  • Officials whose earnings are made up mainly of fees paid by the public, for example, Registrars

The employee is responsible for paying the income tax deducted to HMRC (Banking Operations).

DPNI Scheme type

A DPNI scheme type is appropriate where the normal PAYE procedures are unsuitable. The employee is responsible for the deduction of his or her own income tax and employees share of NI contributions. Either of the following criteria may apply

  • Certain types of employees or office holders, these include

    • Roman Catholic Priests and Clergy of the Church of Ireland
    • Officials whose earnings are made up mainly of fees paid by the public, for example, Registrars
    • Certain employees of foreign and Commonwealth governments, for example, a British chauffeur on the staff of a foreign embassy
  • An individual, who is required to pay their own NI. These include employees of

    • A foreign embassy or consulate which has refused to operate PAYE, or a foreign employer who has no address in the UK from which earnings are paid

The employee is responsible for paying the NI contributions to HMRC (Banking Operations).

DPTC

DPTC (Disabled Persons’ Tax Credit) was introduced in October 1999 to help lower-paid people whose earning capacity is reduced because of their illness, or disability puts them at a disadvantage in getting a job.

The credit replaced the Disability Working Allowance social security benefit, administered by the Benefits Agency (BA) and the Social Security Agency (SSA) in Northern Ireland.

Drill down button / icon

The ‘Drill down icon’ will be a ‘magnifying glass icon’ when opening the screen in View mode and a ‘pencil’ icon when opening the screen in Edit mode.

The [Drill down] button will appear at the end of the corresponding row.

DT Digest

Double Taxation.

This is a guide to entitlement to double taxation relief for individuals living outside the UK.

Due date

Employers and contractors are required to send in their End of Year (EOY) returns within 44 days of the end of the deduction year. That is normally by 19 May each year.

This period may be extended by a period of grace.

Duty geared penalty

A duty geared penalty is

  • Imposed under S98A (2)(b) TMA 1970
  • Considered where failure to submit an annual End of Year return continues for more than 12 months after the due date
  • Determined without prejudice to any interim penalties already issued
  • Only issued where it has been authorised by Tax Administration Advice (TAA)

Top of page

E

EBS

EBS (Employer Business Service) is the computer system that

  • Holds employer records
  • Supports staff working on Employer sections

ECON Number

Where an employer elects that their employees are contracted out of the state earnings-related pension scheme (SERPS), HMRC will issue a contracting-out certificate to the employer. A copy will also be forwarded to the PAYE Employer Office.

The certificate will confirm the employer’s unique ECON number that should be quoted when completing the form P35, and in any correspondence with NICO regarding contracted out matters.

The ECON number will always commence ‘E3’ and be in the format E3NNNNNNL (N = number, L = letter).

You should file your copy of the contracted-out certificate in the employer file and make a note of the ECON number in the EBS Notes.

ECS

Employer Compliance System is a computer system that provides support for the processing, examining and reviewing of returns from employers.

EDI Employer

An EDI employer is one that submits information to HMRC electronically using Electronic Data Interchange (EDI). Employment Maintenance forms submitted by this means are

  • P45(1) and (3)
  • P46
  • Pension notifications

EDI also allows employers to receive the following forms electronically on a daily basis

  • P6
  • Budget P6
  • P9

ELECT Scheme type

An ELECT scheme type is appropriate when councils or local authorities make payments to individuals in respect of electoral duties. These include

  • Returning officers
  • Acting returning offices
  • Presiding offices
  • Polling clerks
  • Counting assistants
  • All others engaged in the conduct of public elections and referenda

Electronic filing

Means the method by which employers are able to submit their annual returns and other forms using electronic communications.

This service is known as PAYE Online filing for Employers.

The communication can be by either

  • Internet
    Or
  • Electronic Data Interchange (EDI)

Note: Use of Magnetic Media is not considered to be an electronic communication.

Electronic payment

From 6 April 2004 large employers are required to make in-year PAYE / NIC payments electronically.

Approved methods of electronic payment include

  • Direct Debit
  • Internet, telephone banking or BACS Direct Credit
  • Debit or Credit Card over the Internet: BillPay
  • CHAPS
  • Bank Giro Payment
    And
  • Post Office Payment

Employer

For the purposes of PAYE the term employer means any person who pays earnings.

An employer by definition is ‘an individual or business which employs workers’.

Please note however, that an employer will for the purposes of scheme types also include an individual within the Direct Payment or Direct Collection (Employee only NIC) arrangements.

Employer Alignment Submission (EAS)

As part of the joining process for RTI this is the alignment method that will be used by employers with more than 250 employees on their PAYE Scheme and / or those who have to split their scheme submission for alignment. In essence, the EAS is a list of all live employments in the PAYE Scheme, as well as those employees who have left since the previous 6 April.

Employer Data Exception Unit (EDEU)

The unit is located at Banking Operations, Shipley (formerly known as Accounts Office Shipley).

The EDEU are responsible for dealing with Data Exception Reports. These paper reports are generated where an update made to an employer record on EBS is rejected by BROCS.

Employer Payment Summary (EPS)

Under RTI an EPS can be sent if

  • No payments are made to any employees in a tax month
    Or
  • An employer wants to recover statutory payments, NICs compensation on statutory payments, Construction Industry Scheme (CIS) deductions suffered (limited companies only) or an amount under the Regional National Insurance Contributions Holiday for New Businesses (NICs Holiday)

Employer reference

These are the numbers and letters, alone or in combination, used by HMRC to identify an employer for the purposes of PAYE regulations.

All new employer references are system generated from April 2000 unless it is for a transferred record. See PAYE30015 for further guidance.

Employer references will always be prefixed by a 3-digit office number and consist of either a

  • Manually allocated reference which must not exceed 7 characters and the first character of which must be in the range A - Z , 0 - 9
    Or
  • System allocated reference which is 7 characters in the format Aznnnnn, where

    • ‘A’ is an alphabetic sequential character (not the initial letter of the employer’s name)
    • ‘Z’ is a character generated by the system. This character is fixed until it reaches its natural usage limit. At this point the system will use the next character in the alphabet
    • ‘nnnnn’ are 5 numeric characters

Employers with diplomatic immunity

Employers with diplomatic immunity cannot be obliged to comply with the PAYE / NIC Regulations.

They include

  • Embassies and High Commissions
  • Consular Missions
    And
  • Certain international organisations. For example INMARSAT (International Maritime Satellite Organisation) and the European Centre for Medium Range Weather Forecasts

Enforcement office

The Enforcement & Insolvency Service is made up of three elements

  • Enforcement Office (Belfast)
  • Enforcement and Insolvency Service (Worthing) which embraces Debt Management and Compliance Services. Included under this umbrella is both the Voluntary Arrangement and Insolvency Service
  • Enforcement Office (Scotland) which also includes the Civil Recovery Section

EPA Scheme type

An EPA scheme type is appropriate to record PAYE tax and National Insurance due on earnings paid to employees of companies in receivership, for example

  • Holiday pay
  • Arrears of pay arising before the receivership took place

These are set up and closed on instructions from the Debt Management office.

ERIC

The External Routing Interface Component (ERIC) is a new computer component introduced to support the filing of employer annual returns in batches.

All return information, both paper and electronic submissions will pass through ERIC from April 2005.

For more information see PAYE41015.

EXAM Scheme type

An EXAM scheme type is appropriate where Universities and Polytechnics pay fees to examiners, invigilators, settlers and for all related duties in any way connected with

  • GCSE and ‘A’ level examinations conducted by the various examining boards
    And
  • First degree examinations conducted by Universities

Exemption

Double Taxation.

Exemption is a term used when an individual has been given full relief from UK tax under the terms of a double taxation agreement.

Expat team

There is a centralised Expat Team in Manchester (Trinity Bridge House) that deals with the taxation affairs of all inward expatriates. The team is part of CAR Expats.

Top of page

F

Filed online

Filed online indicates that the employer has filed their annual return directly to HMRC by

  • PAYE Online for Employers (Internet)
    Or
  • Electronic Data Interchange (EDI)

First Full Payment Submission (First FPS)

Under RTI the First FPS is the method which most small to medium employers will use to align (rather than EAS - see Employer Alignment Submission definition). The First FPS essentially contains the same information as the EAS but also includes the year to date financial data for each employee, including those who are no longer in the scheme.

Employers who aligned using the EAS approach will also be required to complete a First FPS in order that financial details are provided for those who left the PAYE Scheme prior to alignment.

Fixed penalty

A fixed penalty is

  • Imposed under S98A (2)(a) TMA 1970
  • Issued and calculated automatically by ECS
  • Based on the employer / contractor’s return details
  • Subject to certain exceptions and exclusions
  • Issued where an employer or contractor fails to submit their annual EOY return by the due date

Free pay

Free pay is the total amount of pay that an employee is allowed to receive free of tax up to (and including) the latest pay day. It is a proportion of the maximum allowance of the code.

Full lodgement account

A full lodgment account allows an office to bank cheque and cash payments on a daily basis. A security carrier calls each day to transport the lodgment to the bank.

Note: A cheque for less than £250,000 should be sent to Banking Operations for banking unless there is a compelling reason to bank it locally.

Full Payment Submission (FPS)

This is the report that every employer will make each and every time payments are made to employees after the employer has migrated to RTI (usually following successful alignment). As well as financial information relating to the payments made in the period, the FPS will also contain cumulative year to date figures for all employees on the FPS, as well as informing HMRC of any employee changes since the last FPS.

Top of page

G

Girobank

Girobank is a credit transfer system that enables payment to be made by

  • Paying cash or cheque over a Post Office counter (referred to as Transcash)
    Or
  • Arranging a Girobank Transfer from an account holder’s Girobank account

The payment is credited to one of HMRC’s Girobank Accounts. The target Girobank account is indicated on the payslip. Each account is associated with one of the Banking Operations sites (Cumbernauld, Shipley or Newcastle).

Girobank notifies Banking Operations of the credits received daily in each Girobank account.

Greyed out

When on-screen buttons are inactive, that is they cannot be selected to perform a task, they are shown in a lighter grey than the active buttons. In guidance you see this referred to as greyed out.

This is done to avoid you using the button until you have entered all mandatory information required before further processing can take place. Greying out reduces the need for validation and therefore the number of error messages that otherwise would be presented to you.

A greyed out button becomes active when, for example, you have

  • Entered all required information
    Or
  • Made a selection from a list box

Top of page

H

HMRC activity

There are four types of HMRC activity for which an office may be responsible in SA

  • Processing
  • Technical
  • Debt Management
  • Banking Operations

When an office becomes associated with a taxpayer it assumes responsibility for one of the above areas of work for that taxpayer.

Only one office can have responsibility for a particular area of activity at any time.

An area of activity can be transferred from one office to another when appropriate, for example, when the main source of income changes.

HMRC Enquiry Centres

Formerly known as an IREC, Tax Enquiry Centre or TEC, the HMRC Enquiry Centre is responsible for handling face-to-face enquiries from customers. HMRC Enquiry Centres are situated nationwide.

HMRC Enquiry Centres will

  • Give assistance on tax and NIC enquiries without a prior appointment
  • Provide help and guidance on the completion of appropriate forms and returns
  • Have suitable interviewing facilities
  • Stock appropriate leaflets
  • Handle customer’s payments

Top of page

I

IABD

Income, Allowances, Benefits and Deductions.

IABD is a repository for all information relating to an individual’s income, allowances, benefits and deductions. Information is stored for each tax year.

Icon

An icon is a graphical representation, or picture. Usually you will select the icon to access the system, Computer Based Training or Manual represented by the icon.

Incentive Award Unit

The unit is responsible for all Taxed Award Schemes and enquiries should be referred to

HMRC Incentive Award Unit
Specialist Employer Compliance
SO733S
PO Box 3900
Glasgow
G70 6AA

Telephone number - 03000 577340

Incentive payment

Small employers (0-49 employees) are being offered tax free incentive payments to encourage them to use online filing to file their annual returns.

Both form P35 and forms P14s must be filed on line to qualify for an incentive payment.

The incentive payments are as follows

  • 2004-05 - £250
  • 2005-06 - £250
  • 2006-07 - £150
  • 2007-08 - £100
  • 2008-09 - £75

The incentive will be given by BROCS as a credit against the account for the year in which the return was successfully filed on line.

Information Commissioner

An Information Commissioner

  • Is appointed to ensure that all organisations included within the scope of DPA confirm with the Act
  • Has a range of powers available to ensure that this is achieved

Inland Revenue Information Service

The Inland Revenue Information Service (IRIS) is a computer system for Banking Operations.

Depending on your level of access, IRIS allows you to

  • View taxpayer records held on the Banking Operations computer
  • View and search the Banking Operations indexes of taxpayers
  • View payments held in the Overpayments and Accounting Summary (OAS)
  • Calculate interest and repayment supplement
  • Take screen prints of information shown
  • Update taxpayer records
  • Prepare and print pro-forma payslips

Insolvency Claims Handling Unit

The Insolvency Claims Handling Unit (ICHU) can be contacted at the following office

NICO Contrib 5 and ICHU
BENTON PARK VIEW
LONGBENTON
NEWCASTLE UPON TYNE
NE98 1ZZ

Switch Board - 0191 213 5000

Fax - 0191 225 4002

IRIS

IRIS stands for Inland Revenue Information System. A separate IRIS system is maintained for each Banking Operations office. IRIS provides a NEWSboard and enables an operator to

  • View and update taxpayer records for Banking Operations$ systems other than BROCS, CT Pay and File and SA
  • View AO taxpayer indexes and overpayment records
  • Calculate interest and repayment supplement

For more information about IRIS see the IRIS Systems and Services Manual.

IRO

Until April 2007 there were 5 IROs (Inland Revenue Offices). These were specialist offices based in St Austell, Glenrothes, Sefton and Leicester dealing with annual repayment claims from individuals whose main source of income arises from investments.

The work is now concentrated in one specialist office, Leicester and Northants Claims Office.

ISP

‘Internet Service For PAYE’.

Means by which employers may register to file certain forms as a package using the internet.

Now known as PAYE Online For Employers - Internet’.

Formerly known as ‘Filing By Internet (FBI)’.

ITSO

Information Technology Support Officers.

A New IT Service Centre on 0845 605 2121 was established in August 2006 to manage the work formally carried out by local ITSOs.

Top of page

L

Landing screen

This is the screen used to record the receipt of information from individual’s, agents, letters, forms, telephone calls.

Large employer

A large employer is one with 250 or more live employees.

Each employer record (scheme) is placed into one of four segmentation bands.

A large employer is required by law to use online filing to file their annual end of year returns and make payments by electronic means for all tax years from 2004-05.

Limited company

A limited company is one whose shareholders own that company, however the shareholders liability for that company’s debts is restricted.

Limited liability partnership

Limited Liability Partnership rules allow the income and gains of a company to be taxed on its members as if they were partners in an ordinary partnership.

Linked employees

This term relates to any employee who has ever been associated with that particular employer, and will include

  • All ‘live’ employees and directors which have a computer record with no end date that is either in the past or in the future (for example WTC)
  • All former employees and directors who have now left
  • All ‘live’ or former employees and directors who have been paid tax credits, including those paid below the threshold for PAYE

Liquidation

Liquidation is the legal process for dealing with a company who is unable or unwilling to pay their debts.

There are two types of liquidation

  • Compulsory
    And
  • Voluntary

A liquidator will be appointed to handle the liquidation to

  • Administer the company’s assets
    And
  • Distribute them amongst the creditors in accordance with their rights

There is no fixed term for a liquidation and a company can only be liquidated once.

Live employer

An employer record is live when it contains none of the following

  • An end date due to succession or cancellation
  • Details of a transfer out, merger out or succession out

Top of page

M

Mailing contractor

The term mailing contractor refers to a company contracted by HMRC to deliver output on their behalf.

Examples of output mailing contractors are responsible for issuing include

  • Employer Starter Packs
  • Employer and Budget Packs for new and existing employers
  • P9 coding notifications
  • P6 coding notifications

Management unit

A Management Unit (MU) is either the whole or two or more parts of an office.

Each MU is more or less treated as an office within an office. Each MU has

  • Responsibility for specific taxpayer records
  • Designated terminals attached to it

The number of MUs an office is divided into is usually for local management to decide.

Mediated

Contacts resulting from direct interaction with an individual.

Medium employer

A medium employer is one with 50 to 249 live employees.

Each employer record (scheme) is placed into one of four segmentation bands.

A medium employer is required by law to use online filing to file their annual end of year returns and make payments by electronic means for all tax years from 2005-06.

Top of page

N

Net adjustment

This is the monetary amount reported on an End of Year return.

This amount does not take into account any earlier End of Year returns that may have been received for that employer record in that year.

Example

If three End of Year returns have been received for an employer record for a year they would be entered on each screen as follows

Return Class

Net Adjustment

Original return showing total tax due of £100.00

£100.00

Additional return showing a further £50.00 tax due

£50.00

Corrected return showing a figure of minus £10.00 tax

-£10.00

Network Unit

The Network Units are located in

  • Banking Operations Cumbernauld
    And
  • Banking Operations Shipley

The Network Units deal with the collection and recovery work associated with tax charges shown on certain types of assessments and determinations which are issued clerically.

These include

  • Investigation Settlements made on Forms 94
  • Penalty Determinations issued on Forms 394
  • Regulation 80 Determinations issued on Forms P380
  • Pension Fund Surpluses

NICO

NICO stands for National Insurance Contributions Office.

This is an Executive Office of HMRC responsible for managing the National Insurance System.

Formerly NICO were part of the DSS and known as the Contributions Agency.

NINO

Each National Insurance contributor is allocated a unique reference, a National Insurance number (NINO), by the National Insurance Contributions Office (NICO).

A NINO consists of two letters then six numerals then one letter. Although the full 9 characters are normally entered on HMRC computer records, it is usually sufficient to enter only the first 8 characters to access the computer record.

NINO Verification Request (NVR)

Under RTI an NVR allows employers to validate or obtain an NINO for an employee.

NI Scheme type

An NI scheme type is appropriate when

  • Wages paid exceed the lower earnings limit for National Insurance contributions
    But
  • Are below the threshold for tax

Non live employer

An employer record which contains one of the following

  • An end date due to succession or cancellation
  • Details of a transfer out, merger out or succession out

NORPRO Scheme type

A NORPRO (Norwegian Protocol) scheme type is used to denote an employer resident in a country that has an off shore article in their Double Taxation Treaty with the UK. For example: Norway, Denmark, or the Netherlands.

The foreign employer operates a special system of UK tax deduction using simplified tax tables and End of Year return that are supplied by the PAYE Employer Office.

Top of page

O

OAS

OAS stands for Overpayments and Accounting Summary. There is a separate OAS computer operating in, and maintained at each Banking Operations site.

OAS handles the reconciliation for all payments that are sent to them (except SA payments) and is used to

  • Temporarily hold payments that cannot be allocated to either an employer or taxpayer record
  • Transfer payments between records
  • Repay amounts directly to the employer or contractor

OCPN Scheme type

An OCPN (Occupational Pension) scheme type is appropriate when an occupational pension provider makes pension payments to

  • Former employees
    Or
  • Dependants of deceased employees

Online Customer Services Team

The Online Customer Services Team provides a separate service for Internet and EDI enquiries.

Online filing

By 2010 all employers, with a few exceptions, will be required to file their annual return online.

Online filing means sending information direct to the HMRC computer cutting out paper. There are three options available to employers

  • PAYE Online from a software package or the HMRC Online Return and Filing - PAYE. This is filing by Internet
  • Electronic Data Interchange (EDI). This is effectively a direct link between the employer and HMRC. It is likely to be appropriate for only the very large employers and some payroll bureaux / agents
  • Using an intermediary, such as a payroll bureau or agent, who will submit the annual returns on the employer’s behalf using one of the above

Note: We must have a signed FBI 2 authorisation before we can send information to agents using PAYE online for Employers - Internet. We can however receive information, on behalf of the employer from any agent or representative.

Both form P35 and forms P14 must be filed online. Employers may be liable to a penalty or miss out on incentive payment if one part is returned on line and one by other means.

Submission of Magnetic Media is not considered to be online filing.

Online Services helpdesk

The Online Services Helpdesk contact details are as follows

Tel: 0300 200 3600

Overseas: +44 161 930 8445

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Minicom: 0300 200 3603

e-mail: helpdesk$ir-efile.gov.uk

Internet:

Opening Times: 8.00am to 8.00 pm 7 Days a week (closed Christmas Day, Boxing Day and New Years Day).

Ordinary Statutory Paternity Pay (OSPP)

Ordinary Statutory Paternity Pay is available to

  • Biological fathers
  • The mother’s husband or partner
  • One member of a couple adopting a child together
  • The adopter’s husband or partner

For those eligible parents, payments will be made through their salary. The employer can either recover

  • 92% of any payments made
    Or
  • 100% (plus compensation) if they qualify for Small Employers Relief (SER)

Organisation Unit

An Organisation Unit is an office or Management Unit within an office.

A unique 6 numeral identifier is allocated to each Organisation Unit.

The first numeral is the office type identifier, that is

  • ‘2’ for offices responsible for processing work irrespective of any debt management activities they may perform
  • ‘3’ for offices which exclusively perform debt management work

Followed by

  • The three numeral office number, including any leading zeros

Followed by

  • The two numeral Management Unit number, including a leading zero, if appropriate

For example, Management Unit 05 - responsible for processing work - in office 091 is identified as ‘209105’.

Original complete return

An original complete annual return is the first return captured in a year where the employer has submitted a P35 together with all expected P14s.

In the case of a PSC scheme where either P35 and a CIS36 are received at the same time, and both are captured at the same time, whichever return was captured first is treated as the ‘original’ for that employer record.

Original Part P35 return

Original Part P35 shows that the return is

  • The first return to be captured for that employer for that year
    And
  • A P35 on its own without any forms P14

Note: In the ‘Employer Further Guide to PAYE and NICs (CWG2)’ Para 13, we recommend that the P35 is submitted last to enable the correct number of batches of P14 parts to be entered on the P35.

Original EOY return

An original End of Year return is the first End of Year return captured for an employer in any year.

In the case of a PSC scheme where a P35 and CIS36 are received, providing both are captured at the same time both returns are treated as ‘originals’ for that employer record for that year.

Output

The PAYE Service generates and issues a range of forms and letters to individuals, agents, employers and capacitors, these are known as ‘outputs’.

There are two main types of output from the PAYE system

  • Bulk issues of a form to many individuals and agents at about the same time, such as the P2 Notice of Coding
  • Individual issue or re-issue of a letter or form when required

Overpayments account (Book 19)

The overpayments account (book 19), also referred to as an overpayments register, is a suspense account to which payments banked by a Processing Office or Debt Management Office are allocated temporarily.

The overpayments account is used where, for example, the

  • Charge to which the payment relates cannot be traced
  • Payment allocation details are not clear
    Or
  • Payment is intended for NICO or the TCO

Once any enquiries have been completed the Processing Office or Debt Management Office normally clears the overpayments account entry by

  • Transferring the payment to duty either locally or to another office
    Or
  • Arranging for a payment to be issued to NICO or TCO

Top of page

P

P228 Consecutive number

Form P228 is automatically generated by the computer as a result of capturing a return and is sent direct to the PAYE Employer Office.

Consecutive numbers are allocated per office for each return in the order in which they are captured.

Each P228 will have its own unique consecutive number.

Note: Only one copy of the P228 is produced. There is no office copy.

Function VIEW EOY RETURNS HISTORY can be used to view each P228 generated.

P239 list

Form P239 is a summary list automatically generated by the computer of between one and twenty forms P228. It is sent directly to NICO. A copy is not forwarded to the PAYE Employer Office.

Each P239 contains

  • Number of schemes for processing
  • Tax District number
  • P239 List number
  • Date of issue
  • P228 consecutive number
  • Employer’s name
  • Employer reference number
  • Tax year
  • Number of returns
  • Remarks

P239 list number

Form P239 is automatically generated by the computer as a result of capturing a return and is sent direct to NICO.

Each form P239 is allocated a list number.

Part P35 return

A part P35 return is one where the employer has submitted a P35 without the expected forms P14 required to make a complete return.

Note: In the ‘Employer Further Guide to PAYE and NICs (CWG2)’ Para 13, we recommend that the P35 is submitted last to enable the correct number of batches of P14 parts to be entered on the P35.

Pay adjustment tables

These tables show the weekly and monthly pay adjustment figures. They give you the correct figure of

  • Free pay, where the code is a suffix code
    Or
  • Additional pay, where the code is a K code

PAYE Employer Office

The PAYE Employer Office is the office which is specifically responsible for

  • Maintaining employer records
  • Day to day work on employer aspects
  • Processing employer returns

Payment card reward scheme

A payment card reward scheme is

  • A scheme set up by a payment card company, bank or building society to tax payments of cash made to an employee or third party retailer, who passes this on to their employee as a reward for the recovery of a lost or stolen payment card or cheque guarantee card

Payroll agent

A payroll agent is a person or group of persons appointed by an employer to handle their payroll.

You must ensure that the payroll agent’s details are entered on the employer record in the appropriate PAYROLL & CORRESPONDENCE DETAILS fields.

An appointed payroll agent will receive all automated correspondence issued by HMRC and deal with all of the following

  • Operation of PAYE
  • Employer’s copies of coding notices
  • Payslips
  • Employer Pack
  • End of Year returns
  • General employer correspondence

A payroll agent may also act as agent for the employer dealing with other areas of an employer’s tax affairs for example penalties and assessments.

When the payroll agent does also act in other areas of an employer’s tax affairs you should set the Agent indicator on the employer record using Function

  • AMEND EMPLOYER SUMMARY for an existing employer record
  • EMPLOYER SET UP when setting up a new employer record

Period of grace

This period of grace is additional time for an employer to submit an End of Year return, to accommodate delays in transmission (postal delays).

Extra Statutory Concession (ESC) B46 states that ‘The Inland Revenue will not charge a penalty if a return is received on or before the last business day within seven days following the statutory filing date’.

A business day is any day other than a Saturday, a Sunday, Christmas Eve, Good Friday or any bank or public holiday.

Permanent overpayment

An overpayment arising on the Banking Operations record is to be regarded as a permanent overpayment where

  • The amount does not exceed £10 (this was £100 between April 2003 and September 2003) and repayment, reallocation or transfer has not been requested by the employer or contractor
    Or
  • The amount exceeds £10 (this was £100 between April 2003 and September 2003) but cannot be related to particular employees or subcontractors
    Or
  • The employer / contractor has refused repayment or credit to a later year
    Or
  • Any other reason exists which makes repayment, reallocation or transfer inappropriate, at the time or at any time in the future

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

POP return

This term is used to describe a return that has been completed and authorised by the Debt Management office which is subsequently sent to the PAYE Employer Office to enable a permanent overpayment to be cleared.

Portal

A portal or gateway provides access to specified information and services.

Employers are able to file their returns using the following portals

  • Electronic Data Interchange
  • Internet

Principal employer

In relation to a TRONC scheme, the principal employer is the person or body who pays the employees wages.

Privileged user

A Privileged User is allowed to use certain COP / CODA functions on taxpayer records outside the parent Management Unit (MU).

Processing Centre

A Processing Centre (or Data Centre) is responsible for producing the ‘Daily batch’. This is the computer action for processing information from on-line functions and printing the output from it. An example is the issue of forms P2 and P6 from Daily Coding functions.

Pro-forma

This indicates that the return has been completed on behalf of an employer or contractor.

It is not a return that is received from the employer.

For tax years up to 2004

Pro-forma returns are not recorded as received prior to their capture.

For tax years 2005 onwards

Pro-forma returns must be recorded as received prior to their capture.

Note: Quality standard checks do not apply to pro-forma returns.

EBS Function RECORD RETURN RECEIPT must be used to record receipt of the returns as having ‘passed’ the paper quality check.

P Scheme type

A P scheme type is appropriate for all organisations and businesses making payments to employees, pensioners and office holders, for example, directors.

The employer must operate PAYE in all the following circumstances

  • When making a payment of earnings to an employee or when an employee becomes entitled to payment
  • On all payments above certain limits
  • When the Processing Office tells him or her to use a certain code

PSC Scheme type

A PSC scheme type is appropriate when

  • A contractor in the construction industry makes payments to a subcontractor
    And
  • As an employer they have employees liable to PAYE deductions

PSS Scheme type

A PSS scheme type is appropriate when

  • The Trustees of a Profit Sharing Scheme make a payment on behalf of an employer in respect of shares given by that employer to its employees
    And
  • The recipient shareholders are now neither

    • Employees of that employer
      Or
    • Pensioners receiving an occupational pension from that employer

The trustees are required to deduct tax from these payments under PAYE using code BR.

Top of page

R

Radio button

A radio button is used to set a signal or indicator on the employer or taxpayer record.

It is presented as a circle

  • Blank where it does not apply
  • With a black dot in the centre where it does apply

To set the signal or indicator

  • Select the radio button

For example

  • Where the taxpayer is a Director you will select the DIR radio button to set the indicator

Real Time Information (RTI)

Using RTI employers and pension providers will tell HMRC about tax, National Insurance Contributions (NICs) and other deductions when or before the payments are made, instead of waiting until after the end of the tax year. RTI improves and simplifies the PAYE process, making it less burdensome for employers and HMRC. It makes PAYE more accurate for individuals.

Reasonable excuse

This term is not defined by statute, but broadly speaking a ‘reasonable excuse’ is

  • An unusual event that was either unforeseeable or beyond the person’s control which prevented a return being sent back by the deadline or tax and NIC being paid by the due date
  • Not prescriptive and must be considered based on the facts of that case

Recovery Office

The term Recovery Office includes

  • Local Debt Management Offices
  • Enforcement & Insolvency Services (EIS)
  • Banking Operations Tracing Units
  • Banking Operations Review Unit
  • Banking Operations Public Department Collection

It excludes the Recovery Group Offices (RGO) and other areas of Debt Management & Banking.

Registered (Data Protection Act)

The Data Protection Act makes provision for a Data Protection Registrar and the setting up of a register in which personal data and the purpose or purposes for which it is held must be registered.

HMRC computer systems are included in the register.

The information in the register is open to public inspection.

Relief

Double Taxation.

Relief is a term used when an individual is entitled to tax relief on a particular source of income.

Remittance

Double Taxation.

Under some Double Taxation Agreements, an individual can only receive relief from UK tax on the income they remit (transfer) to their country of residence. An individual does not have to remit all of their income to that country. When making a double taxation claim, the individual needs to include the exact amount of income that they remit to the country of residence.

Responsible Organisation Unit

The responsible Organisation Unit is an office or Management Unit (MU) within an office that has responsibility for the employer record.

A unique 6 numeral identifier is allocated to each responsible Organisation Unit.

The first numeral is the office type identifier, that is

  • ‘2’ for Processing and Technical Offices (irrespective of any recovery activities)
  • ‘3’ for offices which exclusively perform recovery work

Followed by

  • The three numeral office number, including any leading zeros

Followed by

  • The two numeral MU number, including a leading zero, if appropriate

For example, Management Unit 05 in Processing Office 091 is identified as ‘209105’.

Retrospective claim

Double Taxation.

A double taxation claim can be made on behalf of a deceased individual providing it can be certified by the overseas tax authorities. This is known as a retrospective claim. A retrospective double taxation claim can also be made by an individual even if they are no longer resident in that country. Again, this can only be done if the form is certified by the overseas tax authorities.

Return

All employers / contractors must submit a return for each year in which they have made payments to their employees or subcontractors.

The return includes details of

  • Payments and deductions made for individual employees / subcontractors
  • Amounts paid over to Banking Operations
  • A signed declaration

The type and combination of forms required will depend on the PAYE scheme type operated.

All returns must be on an official P35 employer annual return.

Return Class

When returns are captured for tax years 2005 onwards they are classed in one of 5 ways

  • Original Complete
  • Original Part P35
  • Additional Complete
  • Additional Part P35
  • Correction

When using Function VIEW EOY RETURNS HISTORY, if the Return Class is blank for any particular return then the details for that return have not yet been captured.

For tax years up to 2004 the Return Class will be either

  • Original
  • Additional
    Or
  • Correction

Return part

From April 2005 an employer (or their agent) operating a PAYE scheme can submit their employer’s annual return (P35 and forms P14) in parts using different channels - Internet, EDI, paper and Magnetic Media.

If an employer intends to send the whole return by paper, then the return must be submitted as a complete return and not in parts.

Where an employer chooses to submit their return in parts they will need to

  • Record the number of parts, in which forms P14 will be sent, on the form P35
  • Attach a P14 Cover sheet for each paper part P14 that is sent. The employer will also need to provide a unique identifier for each part P14 submitted

RLS

Where for example Royal Mail is unable to deliver a communication, it will be returned to the sending office (either direct or via Cumbernauld) by their Returned Letter Section.

An RLS indicator should be set on the Employer Business Service (EBS) employer record for either the Business address or Correspondence address when you receive undelivered mail or are notified that the address held is no longer valid.

Function AMEND EMPLOYER SUMMARY is used for this purpose.

RSI

The Return Status Indicator (RSI) will indicate the stage an employer return has reached in the ERIC consolidation process.

The RSI entries will indicate

  • ‘1’ That the return has yet to be consolidated within ERIC (awaiting receipt of one or more parts)
  • ‘2’ That the return has been consolidated within ERIC (all expected parts have been received)
  • ‘3’ That the return cannot be consolidated within ERIC (all expected parts have not been received)

Rest of UK (rUK)

The rest of the UK refers to customers who live in England, Wales and Northern Ireland to differentiate them from Scottish taxpayers.

Top of page

S

SA

SA (Self Assessment) was introduced in the 1994 Finance Act.

For individuals who receive returns, and for partnerships and trusts, the first year of self assessment was 1996-97.

An SA computer system

  • Holds SA taxpayer records
  • Supports staff in the administration of Self Assessment

SA Taxpayer reference

The SA taxpayer reference must be one of the following

  • 10 character UTR (Unique Taxpayer Reference) in the format 9999999999
  • First 8 characters of the NINO in the format AA999999
  • 8 character temporary reference number in the format 99A99999

Scheme index supplement printout

Scheme Index Supplement printouts are no longer generated. The COP functionality which supported the Scheme Index Supplement printout was decommissioned with the introduction of the PAYE Service.

Segmentation

This term is used to describe the annual process of categorising each employer record (scheme) into one of four segmentation bands.

This information is used for the purposes of determining if and when an employer is required by law to use online filing to file their annual end of year returns.

Segmentation band

Each employer record (scheme) is placed into one of four segmentation bands for the purposes of determining if and when (between April 2005 and April 2010) an employer is required by law to use online filing to file their annual end of year returns.

The four segmentation bands are

  • Schemes with 250 or more live employees
  • Schemes with between 50 and 249 live employees
  • Schemes with 49 or less live employees
  • Schemes that are excluded from being required to file electronically (for example certain scheme types)

Large and medium employers can appeal against using online filing on religious grounds. If the appeal is successful the schemes will be exempt from filing electronically.

Segmentation count

The number of live employees associated to an employer record at the time of the annual review date.

This information is used to determine when (between April 2005 and April 2010) an employer excluding those exempt or excluded is required by law to use online filing to file their annual end of year returns.

SICK Scheme type

A SICK scheme type is appropriate where a third party is responsible for paying sick pay to the employees of more than one employer, for example, an insurance company.

Simplified tax tables

Table P16 is given to employers of personal and domestic employees who use the P12 card procedure.

The table

  • Is simplified and non cumulative
  • Includes instructions to the employer
  • Can be used for weekly or monthly paid employees
    And
  • Must not be issued to commercial or industrial employers

As free pay tables are not issued with cards P12 you must enter the free pay for Week 1 / Month 1 on each card before issuing it.

Scottish Rate of Income Tax

This rate of tax started on 6 April 2016. It is for all taxpayers who are resident in Scotland for the majority of the tax year. See PAYE100035 for further information.

Start Notice

A Start Notice (form SL1) is a computer generated form that is automatically sent to an employer when either

  • A successful match is achieved between the Students Loan Company record of borrowers and HMRC PAYE computers
    Or
  • A form P45 relating to a borrower is processed by HMRC and has no entry in the Student Loans box

The Start Notice instructs the employer to start making Student Loan deductions from the first available pay day following the Start date shown on the form.

Start Notices are not issued annually in respect of the same borrower. The instructions in the Start Notice continue to apply until the loan is repaid or otherwise cancelled.

There is no clerical version of the Start Notice and stocks are not supplied to local offices.

Static NIB

Double Taxation.

If an individual lives in a country where by the UK State pension does not increase each year, the State pension is referred to as being static.

Statutory Adoption Pay (SAP)

Statutory Adoption Pay is available to

  • Individuals adopting a child on their own
    Or
  • One member of a couple adopting a child together

There are qualifying conditions for SAP.

If a couple are adopting the child jointly, SPP may be payable to the one who is not receiving SAP.

For those eligible parents, payments will be made via their salary. The employer can then claim back

  • 92% of any payments made
    Or
  • 100% (plus compensation) if they qualify for Small Employers Relief (SER)

Statutory Maternity Pay (SMP)

Statutory Maternity Pay is available to women

  • Who have been employed by the same employer in the 26 weeks going into the qualifying week
  • Are still pregnant at the start of the 11th week before the week the baby is due or have had the baby by then
  • Have average weekly earnings which are not less than the LEL
  • Have given at least 28 days notice before they wish the SMP to start
  • Have provided medical evidence (MATB1) to their employer within 21 days from the day their Maternity Pay Period starts

For those employees eligible, payments will be made through their salary. The employer can then claim back

  • 92% of any payments made
    Or
  • 100% (plus compensation) if they qualify for Small Employers Relief (SER)

Statutory Sick Pay (SSP)

Statutory Sick Pay is payable to

  • Employees who have done some work under an employment contract before going off sick
  • Are incapable of work for at least 4 days or more in a row
  • Have at least one qualifying day in each week
  • Have notified their employer of their sickness within 7 days
  • Have provided medical evidence if required
  • Have earnings equal to or greater than the lower earnings limit (LEL) for National Insurance contributions

For those employees eligible, payments will be made through their salary. The employer can recover some or all of the SSP paid only if they qualify under the Percentage Threshold Scheme (PTS).

From 6 April 2014, the recovery of SSP will be abolished but employers will still be able to recover SSP paid for periods of sickness up to 5 April 2014 only. After 6 April 2016 no further recovery of SSP paid will be allowed.

Stop Notice

A Stop Notice (form SL2) is a computer generated form that is automatically sent to an employer when either

  • The Student Loans Company estimate that a loan is about to be repaid
    Or
  • The loan is to be cancelled or Student Loan deductions are to cease for some other reason

The Stop Notice instructs the employer to stop making Student Loan deductions from the first available pay day following the Stop date shown on the form.

There is no clerical version of the Stop Notice and stocks are not supplied to local offices.

Sub-account

The sub-account is a reference that is made up of

  • The tax group reference
    And
  • ASN (assessment sub number)

For example 123 PX 12345678 9901.

It forms with the instalment reference the overall Collection reference that is used to identify each employer record on BROCS.

Subcontractor

A subcontractor is any business that has agreed to carry out construction operations for another business or public body, which is a contractor.

The term subcontractor includes

  • A company, any corporate or public body, as well as any individual self-employed person running a business or partnership
  • A labour agency or staff bureau which contracts to either get work done with its own workforce , or to supply workers to a contractor
  • A foreign business if the construction operations take place in the UK
  • A local authority if they are engaged on construction operations for someone else
  • A gang leader who agrees with a contractor on the work to be done , and receives payment for the work of the gang

Subcontractors holding CIS6 certificates

A Subcontractors Tax Certificate (CIS6) permits the contractor to make payments to the subcontractor named on the certificate without deduction of Income Tax.

Subcontractors holding registration cards

A Registration Card (CIS4) is held by a subcontractor. This shows that a subcontractor is registered with the Construction Industry Scheme (CIS).

Production of this card allows a contractor to pay the subcontractor named under deduction of tax.

Subject access enquiries (Data Protection Act)

See Subject Access Requests.

Subject access officers

Subject Access Officers (SAO) have the specific responsibility of taking over and working any subject access requests in conjunction with the case owner(s) and with the support and guidance of the Customer Relations Manager and Debt Management Managers.

The SAO will

  • On receipt of a subject access request notify the Customer Relations Manager and the Debt Management Manager
  • Fax a copy to the Data Protection Subject Access (DPSAR) team in Longbenton
  • Ensure retrieval and collation of the relevant records
  • Edit those records as necessary in strict accordance with the exemptions permissible under the terms of the Data Protection Act
  • Working with the DPSAR team provide access to the individual in the most appropriate form

Subject access requests (Data Protection Act)

Data subjects are individuals for whom information is recorded on computer, or on clerical records. Subject access requests (SARs) are applications from individuals for details of the information about themselves that is held by HMRC.

Subject to tax

Double Taxation.

The term ‘Subject to tax’ usually means that the person must actually pay tax or be treated as liable to tax on their income in their country of residence. The term is used specifically when deciding if double taxation relief is available. An individual can be subject to tax, but not be paying tax if for example their income is less than the tax threshold for that country.

Summary bank facilities

A summary bank facility is a method of banking payments of £250,000 or more.

Submitter

A submitter submits a return or return part by paper or Filed Online as an employer or on behalf of an employer.

Surcharge

From deduction year 2004-2005, large employers (those with 250+ employees) are required to make monthly payments of PAYE / NIC deductions in full and on time by an approved electronic method. Where the employer fails to comply, HM Revenue & Customs will impose a surcharge at the end of the deduction year when the P35 is processed.

Where a surcharge has been imposed, posting type ‘SUR’ will be displayed in Function VIEW BROCS (POSTINGS SUMMARY) (Format 3). Any amendment to the surcharge, for example where the P35 has been amended, will be shown as posting type ‘ASR’.

Top of page

T

TAS Scheme type

A TAS scheme type is appropriate when providers of incentive awards have entered into special accounting arrangements for paying the basic rate tax liability on non-cash awards made to their own or to other people’s employees.

This means that the provider and not the person receiving the award, pays the basic rate tax.

Taxable Pay Tables

These tables are used to calculate the tax due on an employee’s taxable pay on any given pay day

  • The taxable pay for a suffix code is total pay to date less the free pay to date
  • The taxable pay for a K code is total pay to date plus the additional pay to date

Tax Administration Advice Unit

For advice on appeals procedures and appeals on religious grounds contact

Tax Administration Advice
Tax Appeals Policy
Room 1C/26
100 Parliament Street
LONDON
SW1A 2BQ

020 7147 2397 or

020 7147 2273

Tax Equalisation

HMRC and Tax Professionals often use the words ‘Tax Equalisation’ to refer to contractual arrangements between employers and employees, where

  • Employees are entitled to specified net cash earnings and non-cash benefits
    And
  • Employers undertake to meet the UK income tax arising from the provision to the employees of the cash and the benefits

Tax free payment

Small employers (0-49 employees) are being offered tax free incentive payments to encourage them to use online filing to file their annual returns.

Both form P35 and forms P14s must be filed on line to qualify for an incentive payment.

The incentive payments are as follows

  • 2004-05 - £250
  • 2005-06 - £250
  • 2006-07 - £150
  • 2007-08 - £100
  • 2008-09 - £75

The incentive will be given by BROCS as a credit against the account for the year in which the return was successfully filed on line.

Tax geared penalty

See Duty Geared Penalty.

Tax payment voucher

Tax Payment Vouchers (CIS25) is a 3-part form issued to all contractors set up on the CIS system.

The vouchers are personalised and contain the following details

  • Contractor name
  • Contractor tax reference

Three types of the CIS25 voucher are available to contractors

  • CIS25(M), a manual voucher
  • CIS25(I), an impact printable voucher
  • CIS25(E), an electronic voucher

Tax Tables

A set of official Tax Tables will normally consist of

  • Tables A - Pay Adjustment Tables
  • Tables SR + B to D - Taxable Pay Tables
  • Calculator Tables

If the employer operates the Simplified Tax System they will receive instead

  • Form P16 - Simplified Deduction Scheme - guidance on how to complete a form P12 and the simplified tax tables

TCO

TCO stands for Tax Credit Office. This office was set up in October 1999 and replaced the Family Credit Unit.

The TCO is responsible for the administration of the Tax Credit System (TCS).

TDSI

Tax Deducted Scheme for Interest

Technical Advice Group (TAG)

Double Taxation.

This is a specialist area that can advise on Double Taxation matters regarding non-resident companies and individuals. Submissions are made to them by local O / HO support. TAG is located at

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Technical Support System

A Technical Support System (TSS) is a local software application that can be accessed from your Desktop menu. TSS provides assistance with a range of regular everyday tasks that are performed frequently in a large number of offices.

These tasks are often related to one or more of the many existing mainframe systems. A TSS is a fast and effective way of supplementing mainframe facilities and supporting processes (for example, the calculation of chargeable gains) that with a mainframe system are largely clerical.

Temporary number

Note: From the year 2004-05 temporary NINOs must not be used on P14 returns. If a NINO is not known, the employer should leave the NINO box blank and complete the date of birth and gender in appropriate boxes.

For more information about Temporary Numbers see PAYE60035.

Temporary reference number

A temporary reference number was allocated to a taxpayer by the COP computer when a record was set up and the NINO was not known.

The temporary reference number is produced in the following format

  • Two numbers

Followed by

  • One letter

Followed by

  • Five numbers

For example 12A34567.

Note: From the year 2004-05 temporary NINOs must not be used on P14 returns. If a NINO is not known, the employer should leave the NINO box blank and complete the date of birth and gender in appropriate boxes.

Tracking Tool

The Tracking Tool is the part of the External Routing Interface Component (ERIC) used to track the progress of an employer annual return or return part through various parts of the End of Year process.

The tracking tool is used to

  • Record incoming annual return, or return part information
  • Record the progress of a return through the stages on the End of Year process
  • Record annual return, or return part deletion information
  • Record outgoing complete annual return details

Trade Class ‘C’ - Limited company

A limited company is one whose shareholders own that company.

However the shareholders liability for that company’s debts is restricted.

Trade Class ‘E’ - Investment company

An investment company within Section 130 ICTA 1988 is any company

  • Whose business consists wholly or mainly in the making of investments
    And
  • The principal part of whose income is derived from those investments

Included in this meaning is any savings bank, or other bank for savings.

Trade Class ‘F’ - Partnership

A partnership refers to the relationship between two or more people who run and own a business together and share its profits or losses.

Trade Class ‘I’ - Individual or sole trader

An individual or sole trader business is one that is owned and run by one person.

Trade Class ‘L’ - Local authority

A local authority is a body that has the statutory power to bill or make demands in accordance with Local Government Finance Acts, for example

  • County Councils
  • District Councils
  • Metropolitan Boroughs
    And
  • Parish Councils (Community Councils in Wales)

Trade Class ‘P’ - Public corporation

A public corporation is a corporate body

  • That has been established by or in accordance with the provisions of any enactment (Act of Parliament)
    And
  • Has a membership consisting of or including persons appointed as members by a Minister of the Crown

Trade Class ‘S’ - Registered society

A Registered Society is one that is registered by the Registrar of Friendly Societies under Section 8 of the Friendly Societies Act 1974. It will have a registration number and Financial Institutions Division will deal with any question of whether or not a society is registered.

Some registered friendly societies have a federal structure consisting of a central organisation which has local branches tied to it. These will generally have the word ‘Order’ in their titles. For example, ‘Ancient Order of Foresters’.

Trade name

The trade name is the name under which the employer trades. It is also referred to as the business name.

Troncmaster

The troncmaster is the person operating the TRONC. This may be the headwaiter or some other employee who agrees to do this.

For tax purposes, a troncmaster who accepts and understands the responsibilities of the position is regarded as an employer and is required to operate PAYE on each payment from the TRONC.

TRONC Scheme type

A TRONC scheme type is appropriate where

  • A separate organised arrangement exists to distinguish and / or services through someone other than the principal employer
  • The Troncmaster undertakes the duties of collection, custody and payment of the tips

Top of page

U

Unique identifier

A unique identifier is added by the employer to each of the parts of the return submitted.

Each unique identifier can be a combination of up to twelve characters using letters and / or numbers, which have not been used to submit any other parts of the return for the same year.

Unmediated

Contacts resulting from non direct interaction with individuals.

Unprocessed transaction

This is a transaction that has been completed but has not yet been processed because, for example

  • It needs supervision
  • A batch function has not yet been run

User role

A user role reflects a particular job, and will determine the functions that you can use to perform that job.

Each officer is allocated those user roles, and the functions associated with those roles, that are necessary to perform its business.

Your office manager will allocate the user roles you need to perform your job.

You can be given any number of user roles, depending on the activities that you are expected to perform.

UTR (Unique Taxpayer Reference

A UTR (Unique Taxpayer Reference) is a unique set of 10 numerals allocated automatically

  • By the SA computer system when a taxpayer record is set up
  • By the CT computer system when a company taxpayer record is set up. The same UTR will be used to set up an SA record for the company, where required

Top of page

V

Version number

Every End of Year return captured on the Employer Business Service (EBS) is allocated a version number.

The first return captured for an employer record, for each year will be given the version number ‘1’ and any subsequent returns captured for that year will be allocated the next consecutive number.

Use Function VIEW EOY RETURNS HISTORY to view all versions of an End of Year charge information.

Top of page

W

WFTC

WFTC (Working Families’ Tax Credit) was introduced in October 1999 to provide in-work support for lower-paid families.

The credit replaced the Family Credit social security benefit, administered by the Benefits Agency (BA) and the Social Security Agency (SSA) in Northern Ireland.

WTC

WTC (Working Tax Credit) replaced WFTC (Working Families’ Tax Credit) to provide in-work support for lower-paid families.

Windows

Windows is the name given to the graphically based computer operating system employed on most personal computers (PCs). The majority of HMRC mainframe computer systems use a Windows type operating environment to communicate with operators.

The Employer Business Service looks and acts in the same way as Windows based programmes like ‘Word’ and ‘Excel’.

Top of page

X

XP Scheme type

A XP scheme type is appropriate when a contractor in the construction industry makes payments to a subcontractor under a contract relating to construction operations.