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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 402 - annual coding - update ESA - NIB shown (Action Guide)

Work item 402 is generated when the DWP file shows employment and support allowance (ESA) to be updated but the individual’s record has state pension / benefits in the CY+1 tax code.

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

To clear work item 402 follow steps 1 - 15 below. This guide is presented as follows

  Step 1
   
  Steps 2 - 13
  Steps 14 - 15

 

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

2. Check Contact History and other notes for information about why state pension / benefits is coded
   
3. Check whether the state pension / benefits coded relate to ‘Other Benefits’. Where the state pension / benefits relate to ‘Other Benefits’ you should follow the guidance at PAYE130075 and remove the state pension / benefits from the CY and CY+1 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. Update the annual amount of ESA for CY+1 in IABD
5. On the Code Details screen ‘Submit’ to issue the tax code
6. Update Contact History and go to steps 14 and 15
7. Where the state pension / benefits coded do not relate to ‘Other Benefits’ you should check if ESA leaving details have been received. Where ESA leaving details have been received CY, update the CY+1 tax code in the income, allowances, benefits and deductions (IABD) to remove the ESA deduction
8. Update the annual amount of state pension / benefits for CY+1 in IABD
9. On the Code Details screen ‘Submit’ to issue the tax code
10. Update Contact History and go to steps 14 and 15
11. Where the state pension / benefits do not relate to ‘Other Benefits’ and no ESA leaving details have been received, issue a letter to the individual to determine which benefit is being received and the current weekly amount. Trigger the CY+1 tax code using the ‘Calculation Only’ option and do not make any changes to the amounts already held in IABD
12. On the Code Details screen ‘Submit’ to issue the tax code
13. Update Contact History and go to steps 14 and 15

Close the work item

14. Complete the work item notes
   
15. Close the work item