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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer records: set up employer record: agents and employers

It is important when setting up an employer record that if you receive information that some person or body is acting for an employer or contractor you understand

  • Exactly what that person will be responsible for doing on behalf of the employer or contractor
  • Whether all correspondence is to be sent to that person and not sent direct to the employer or contractor
  • Whether you will need to set the Agent indicator on the employer record

Notes: 

1. If you receive a form 64-8 (Authorising Your Agent) you must treat this as priority and send the form to the Central Agent Authorisation Team (CAAT) who will enter the details onto EBS and other systems. Do not send any associated paperwork as this will delay processing. There are a few exceptions listed on the back of the form 64-8 which must be processed by the PAYE Employer Office, not by CAAT.
   
2. We must have a signed FBI 2 authorisation before we can send information to agents using PAYE online for Employers - Internet. We can however receive information, on behalf of the employer from any agent or representative.

Correspondence issued automatically on the Employer Business Service (EBS) is sent to the business address held on an employer record where that address is also the correspondence address. If an agent or payroll agent has been appointed and the employer or contractor requests all correspondence to be sent to them, that address will be stored as the correspondence address on the employer record and correspondence will be sent instead to that address.

The remainder of this subject is presented as follows

Types of agents

There are three types of people or bodies who may act for an employer or contractor in some capacity that you may be involved with. These are

  • An agent
  • A payroll agent

And

  • An accountant or similar financial institution

Agent

For the purposes of EBS an agent is a person who will be dealing with, and require copies of, all correspondence relating to 

  • Operation of PAYE
  • Employer’s copies of coding notices
  • Payslips
  • Employer Pack
  • Employer annual return
  • General employer correspondence
  • Regulation 80 determinations
  • Late annual return penalties
  • Late P11D penalties
  • Other employer assessments

The details for the agent must be entered in the PAYROLL & CORRESPONDENCE ADDRESS DETAILS fields in Function ADDRESS SEARCH accessed from Function EMPLOYER SET UP (or AMEND EMPLOYER SUMMARY if updating the employer record).

If there is an agent who is acting for an employer or contractor we must have a signed authority from the employer giving permission to send correspondence to that person.

This authority (form 64-8 or equivalent) is dealt with by Central Agent Authorisation Team (CAAT) who will set the Agent indictor on EBS and other systems.

The Agent indicator must be set on the employer record for this type of agent.

Payroll Agent

A payroll agent may be employed by an employer to predominately handle the payroll for that employer. They will normally be responsible for handling all of the following

  • Operation of PAYE
  • Employer’s copies of coding notices
  • Payslips
  • Employer Pack
  • Employer annual return
  • General employer correspondence

The details for the payroll agent must be entered in the PAYROLL & CORRESPONDENCE ADDRESS DETAILS fields in Function ADDRESS SEARCH accessed from Function EMPLOYER SET UP (or AMEND EMPLOYER SUMMARY if updating the employer record).

A payroll agent would not normally be involved in handling penalties or Regulation 80 determinations or other HMRC assessments on behalf of an employer.

You should not set the Agent indicator on the employer record unless the payroll agent is responsible for dealing with all aspects covered by an agent.

Accountants

An accountant may be employed by an employer or contractor to deal with any of the following

  • Regulation 80 determinations
  • Late annual return penalties
  • Late P11D penalties
  • Other employer assessments

You will normally find that this type of agent will not deal with the payroll but will deal with specific areas of an employer or contractor’s tax affairs. It is not possible to send any correspondence automatically to this type of agent. Any correspondence to this type of agent will need to be issued manually. Details of this person or body should be entered on the employer record using Function AMEND EMPLOYER NOTES. Where this person acts for the employer or contractor a form 64-8 authority should be obtained.

Note: You must not set the Agent indicator for this type of agent.

Online agent authorisation

An online service allows agents to set up authorisations for the majority of their clients without the need for submitting paper 64-8s or FBI2s. However employers and their agents can still use the paper forms and these should be processed in the normal way.

The service allows agents to use the Internet to set up authorisations for

  • Individuals, organisations, trusts and partnerships under SA - these authorisations will also cover National Insurance and, if they are existing claimants, Tax Credits
  • Businesses and organisations under Corporation Tax
  • Employers operating PAYE schemes

Note: At present this does not include authorisations for VAT or for individuals who are not SA taxpayers.

Online agent authorisation process

To use the online agent authorisation service, agents must be registered for the relevant online service. For example, if they wish to set up authorisations for a PAYE client, they must be registered for the PAYE Agent Online Service.

Once the authorisation request has been successfully processed online, for each service where authorisation is requested, the client will be automatically sent a letter to their correspondence address(es). This letter will confirm the request for authorisation and will contain a unique Authorisation Code. If the request cannot be processed, for example if the clients address is shown as RLS, the agent will be notified by email that an authorisation code cannot be issued.

If the client agrees to the authorisation, they must pass the code(s) to their agent and the agent will then need to enter the code online.

For SA and PAYE employer records, agents will see their online client lists updated within a day and SA will be updated automatically.

EBS will update automatically but it may take up to 7 days before you can view the new PAYE agent details.