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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Individual records: BF policy: when to create a BF (Action Guide)

To decide whether you should create a BF when working correspondence or reviewing a work item which cannot be completed in its entirety, consider steps 1 - 7 below.

Before you create a BF you should be familiar with the guidance at PAYE105510.

When creating a BF you must always refer to the relevant guidance for the correspondence or work item you are reviewing.

This guide is presented as follows

  Step 1
   
  Steps 2 - 6
  Step 7
   

Initial action

1. Who is the information being requested from?
   
  * Customer or third party - go to step 2
  * Another part of HMRC - go to step 7

Information required from a customer or third party

2. Can you obtain all the required information using Business by Telephone?
   
  * Yes - go to step 3
  * No - go to step 4
3. Contact the customer or third party for the required information using Business by Telephone guidelines
  Were you able to successfully obtain all of the required information over the phone?
  * Yes - complete the correspondence or work item following the relevant guidance
  * No - go to step 4
4. Send a letter to request the required information
  The content of the letter will depend on whether you are requesting the information from a customer or a third party
     
    ### Customer or their representative
    When writing to the customer you must
    * Request all the information needed to complete the review
    * Explain the reason the information is required
    * Advise whether the information can be provided by telephone or whether the response must be in writing
    * Include an expected reply date if applicable
    * Advise the customer that it is their responsibility to provide the requested information
    * Advise the customer that until the information is provided the review of their tax affairs cannot be completed
    ### Third party
    When writing to a third party you must
    * Request all the information needed to complete the review
    * Advise whether the information can be provided by telephone or whether the response must be in writing
    * Include an expected reply date if applicable
    You must also write to the customer to
    * Advise who has been contacted
    * Confirm the information that has been requested
    * Explain the reason the information is required
    * Give the expected reply date if applicable
    * Advise the customer that it is their responsibility to ensure their tax affairs are accurate and up to date
    * Advise the customer that until the information is provided the review of their tax affairs cannot be completed
    * Recommend the customer contacts the third party to request either confirmation the information has been sent to HMRC or a copy of the required information, which the customer can forward to HMRC to complete the review at the earliest opportunity
    Go to step 5
  5. Is the deceased indicator set on the customer record?
    * Yes - a BF must be created. See PAYE105521 for guidance on which type of BF to create
    You must make a full Contact History note following the guidance in Action guide tax40011 for correspondence and for work items
    * No - go to step 6
  6. Is there a clear indication that an underpayment in excess of the tolerance outlined in PAYE93075 is due for any individual year?
    * Yes - a BF must be created. See PAYE105521 for guidance on which type of BF to create
    You must make a full Contact History note following the guidance in Action guide tax40011 for correspondence and for work items
    * No - complete the correspondence or work item following the relevant guidance

Information required from another part of HMRC

7. Contact the appropriate part of HMRC and request the information or action required to complete the review
   
  * A BF must be created. See PAYE105521 for guidance on which type of BF to create
  * You must make a full Contact History note following the guidance in Action guide tax40011 for correspondence and work items

Examples

Below are examples of situations where a BF has been decided following the Action Guide.

Example 1

Letter received from a customer advising income from property received from August of the previous tax year with an estimated profit of £2,400 for the current tax year.

The customer has not provided a contact telephone number and a letter is sent requesting details of the income from property received in the previous tax year.

Outcome

The current year estimate of £2,400 would indicate a monthly income of £200 and if a similar amount was received in the previous tax year then there would be an underpayment which exceeds the tolerance. A BF will be required to ensure that a reply is received and appropriate follow up action is taken.

Example 2

Letter received from a customer claiming a repayment for the previous year and advising that they have lost their P11D.

The Employer Compliance System (ECS) does not hold the P11D information and a letter requesting the P11D is sent to the employer.

A letter is also sent to the customer to advise the review cannot be completed until we receive the P11D. We also recommend the customer contacts the employer to request confirmation that the information has been sent or a copy of the required information which can be forwarded to HMRC to complete the review at the earliest opportunity.

Outcome

The information available indicates a repayment is due so a BF is not required as we have advised the customer of the information requested and that it remains their responsibility to ensure their tax affairs are accurate and up to date.

Example 3

Work item 21 is reviewed which has been created on a Temporary Reference Number. Using Trace and Match you find another record for the customer with the correct NINO. You refer the individuals account to be merged before you can continue your review of the work item.

Outcome

There is action required from another part of HMRC before the review can be completed and a BF is required.