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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Coding: coding: general principles: work item 183 - annual coding - update NIB - IB shown (Action Guide)

Work item 183 is generated when the DWP file shows state pension / benefits to be updated but the individual’s record has incapacity benefit in the CY+1 tax code.

Note: An individual cannot receive state pension / benefits and incapacity benefit at the same time, therefore the CY+1 tax code should only contain one of these deductions.

To clear work item 183 follow steps 1 - 12 below. This guide is presented as follows

  Step 1
   
  Steps 2 - 10
  Steps 11 - 12

For details of how to use any of the PAYE Service functions, access the system help.

Initial action in all cases

  1. Review
  • The individual’s record on the PAYE Service
  • Indicators set on the record
  • Any relevant notes

Update the record

  1. Check Contact History and other notes for information about why incapacity benefit is coded

  2. Check if a P45 (IB) or a P45 (IBO) has been received

  3. Where a P45 (IB) or a P45 (IBO) has been received CY, update the CY+1 tax code in the income, allowances, benefits and deductions (IABD) to remove the incapacity benefit deduction. For information about how to enter details and submit for a code calculation refer to action guide tax40002

  4. On the Code Details screen ‘Submit’ to issue the tax code

  5. Update Contact History and go to steps 11 and 12

  6. Where a P45 (IB) or a P45 (IBO) has not been received CY, calculate the incapacity benefit to the day before state pension / benefits commences. Update CY IABD with the apportioned amount of incapacity benefit

  7. Update CY+1 IABD to remove incapacity benefit and include the annual amount of state pension / benefits

  8. On the Code Details screen ‘Submit’ to issue the tax code

  9. Update Contact History and go to steps 11 and 12

Close the work item

  1. Complete the work item notes

  2. Close the work item