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HMRC internal manual

PAYE Manual

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HM Revenue & Customs
Updated
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Coding: coding: general principles: work item 187 - annual coding - update NIB - primary EMPT is IB source (Action Guide)

Work item 187 is generated when the DWP file shows state pension / benefits to be updated but the individual holds a live primary or live secondary employment record for incapacity benefit (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

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 187 follow steps 1 - 12 below. This guide is presented as follows

Initial action in all cases Step 1
   
Update the record Steps 2 - 10
Close the work item 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 the primary employment source is incapacity benefit

  2. Where it is valid for state pension / benefits to be coded and incapacity benefit is no longer the primary employment source, update the employment details in maintain employments. For information about maintaining employments refer to PAYE64001

  3. Update the state pension / benefits with the annual amount for CY+1 in income, allowances, benefits and deductions (IABD). 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 it is valid for the state pension / benefits to be coded and incapacity benefit is still a live source

  • Review the ‘benefit claims’ screen within individual

If an end date is recorded against the incapacity benefit claim

  • Select the Edit Record icon next to the incapacity benefit employment and

    • Select the cessation source as ‘user’

    • Enter the cessation date, select [save]

If no end date is recorded and the work item is being worked in the same tax year that incapacity benefit ceases and state pension commences

  • Set the potentially ceased indicator against the incapacity benefit employment and select [save]

If no end date is recorded and the work item is being worked in the following tax year that incapacity benefit ceases and state pension commences

  • Select the Edit Record icon next to the incapacity benefit employment and

    • Select the cessation source as ‘user’

    • Enter the cessation date as the end of the tax year where state pension commenced and incapacity benefit ceased, select [save]

For example

There is a live incapacity benefit source and state pension commenced 1 June 2010 and work item 187 is being worked after 5 April 2011 (for example CY+1) the incapacity benefit cessation date should be entered as 05/04/2011

  1. Update the state pension / benefits with the annual amount for CY+1 in income, allowances, benefits and deductions (IABD). For information about how to enter details and submit for a code calculation refer to action guide tax40002

  2. On the Code Details screen [Submit] to issue the tax code

  3. 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