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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: potential underpayments (PUPs) in SA cases

Potential Underpayments (PUPs) are no longer coded out in SA cases. Instead they are taken into account in the SA calculation for that year.

Where new potential underpayments are calculated for live Self Assessment cases after annual coding but before the end of the tax year, the system will cancel the potential underpayment to ensure it is not included in the CY+1 tax code.

When a PUP is calculated or amended, an explanation is printed on the form P2. For examples of the text that will appear on the P2 in SA cases see PAYE11020.

Cases moving into SA before annual coding main review

If the SA indicator is set on the PAYE Service record before Annual Coding Main Review takes place in early January, any CY PUP will not normally be coded out in CY+1.

Where a PUP was created before the SA indicator was set, the individual will have been told on the P2 that it would be coded out. You will need to advise them that the PUP will now be collected through the SA balancing payment.

Cases moving into SA after annual coding main review

If the SA indicator is set on the PAYE Service record after Annual Coding Main Review has taken place in early January, any CY PUP will already have been coded out for CY+1. If the individual objects, remove it from the code.

Cases moving out of SA before annual coding main review

If the SA indicator is deleted from the PAYE Service record before Annual Coding Main Review, any CY PUP will be automatically coded out for CY+1.

Where a PUP was created before the SA indicator was deleted you will need to advise them that it will be coded out.

Cases moving out of SA after annual coding main review

If the SA indicator is deleted from the PAYE Service record after Annual Coding Main Review, revise CY+1 to code out any PUP.

Where a PUP was created before the SA indicator was deleted you will need to advise them that it will now be coded out.