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HMRC internal manual

PAYE Manual

Coding: coding: general principles: work item 424 - SA auto coding - manual P2 / P2X necessary (Action Guide)

Work item 424 will be generated where the manual correspondence indicator is set on the individual’s PAYE record. The tax return information will relate to CY-1 but the work item will display as the CY tax year.

To deal with the work item follow steps 1 - 8 below. The guide is presented as follows

  Step 1
  Steps 2 - 6
  Steps 7 - 8

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
  1. Where the manual correspondence indicator has been migrated from COP the reason will be ‘from COP’. Check the COP history in Contact History to see what the original reason for setting the indicator was. If the reason was because of a special output (audio, Braille, welsh or large print) or because of a capacitor on COP, cancel the manual correspondence indicator. For more information about indicators refer to PAYE103065
  2. The Income Tax Residency Status screen will display ‘Scottish Taxpayer’ in the Income Tax Status field to indicate the individual is liable at the Scottish Income Tax rate(s) for the Tax year. Where the individual is a resident of Scotland their tax code will have an S prefix (except for tax code NT) to indicate they are liable to the Scottish Income Tax rate(s), for example, S1060L, SBR, SD0. Further guidance is given at PAYE100035

Update the record

2. Cancel manual correspondence indicator in Maintain Individual. For more information about indicators refer to PAYE103065
  Note: IABD will be populated with information received from CESA, however where the work item is triggered
  * The values for non-PAYE income will not be restricted
  * The maximum 50 per cent K code will not have been calculated
  You should refer to action guide tax40002, and reduce the non-PAYE deductions where required before proceeding to the next step
3. Where the indicator has been cancelled trigger a tax code calculation for CY in IABD. [Submit] the tax code calculation and issue the tax code on the Tax Code Details screen. Go to step 6
  For more information about how to enter details on IABD and submit for a tax code calculation refer to action guide tax40002
4. Where the indicator has not been cancelled trigger a tax code calculation for CY in IABD. [Submit] a tax code calculation
  You should only retain the indicator in exceptional circumstances. Always try to cancel the indicator
5. If the indicator is retained use the SEES tool to issue a manual P2, ensuring the tax code includes an S prefix (expect for code NT) where the individual is a Scottish taxpayer. On the Tax Code Details screen select ‘Manual issue’ from the Issue Forms P2 drop down list
6. Update Contact History

Close the work item

7. Complete the work item notes
8. Close the work item