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HMRC internal manual

PAYE Manual

Employer records: set up employer record: XP scheme - contractor only (no employees) (Action Guide)

When you become aware that the need arises to set up an employer record for an XP (contractor only) scheme type, follow steps 1 - 11 below.


  1. Any contractor or agent who telephone the PAYE Employer Office should be asked to contact the New Employer Helpline at East Kilbride by either
  • A telephone call on 0300 200 3211, or
  • Sending their new employer details to the New Employer Helpline through their email facility
  1. Any written notification received, either by post or by fax, must be dealt with at the PAYE Employer Office.

Setting up new employer records is a priority. Action should be taken within 2 days of notification that a new record is required.

The guide is presented as follows

Steps 1 - 2

Initial action

Steps 3 - 4

Set up employer record

Steps 5 - 7

Long name

Steps 8 - 10

Clerical action

Step 11

New employer pack and reference notification letter

For details of how to access any of the Employer Business Service functions, use PAYE057.

Initial action

  1. Collect and review all the information provided. PAYE20040 provides full details of the information needed

  2. Satisfy yourself this type of scheme is required. More detailed advice is available at PAYE20020

Set up employer record

  1. Use Function EMPLOYER SET UP to create a new employer record

The function has been designed to follow a logical sequence and will not allow you to move on until all the mandatory fields have been completed

The fields you must complete (as a minimum requirement) are

  • Employer Name
  • Business Address (you must select the [Search] button to access the Function ADDRESS SEARCH to trace and store an address on the employer record)
  • Nature of Business
  • Trade Prefix
  • Trade Classification
  • Scheme Type
  • Scheme Start Date
  • Responsible Office
  • Enter a ‘Date Notified’ which is the date you received the information to create the employer record

However, you must record all relevant information held relating to the new employer to ensure that the employer record is as complete as possible. For further guidance see PAYE20040

  1. Make a note of the computer generated employer and Accounts Office reference

Long name

If the contractor name is too long to fit the maximum space available in Function EMPLOYER SET UP an abbreviation must be shown

  1. Contact the contractor to agree the abbreviated name to use

Enter the abbreviated name on the screen

  1. Select the field (box) Employers Name has been abbreviated in Function EMPLOYER SET UP

  2. Send a memo to Banking Operations to

  • State the office number, Accounts Office / PAYE contractor references
  • Inform them that the abbreviated name signal has been set
  • State the full contractor name

Clerical action

  1. For each new contractor take the following action
  • Use Function EMPLOYER NOTES to record your actions and place the post in the employer record pad
  • Issue form CIS1 to the contractor
  1. If you have received form P510 from the SA section or the CT office, follow instructions on the form P510 then dispose of the paper in an appropriate manner
  • Link the top sheet with other papers then use Function EMPLOYER NOTES to record your actions and place a copy in the employer record pad
  1. Otherwise prepare form P510 and send this to the SA section or CT office
  • When the form P510 is returned, review it for any new information. For instance, a Unique Taxpayer Reference, and note this on the employer computer record

New employer pack and reference notification letter

  1. You do not need to take any action to issue a new employer pack and reference notification letter as EBS will automatically issue them

To see what literature is issued automatically

  • Use PAYE056
  • In the Forms Index select ‘New Employer Packs’, and then
  • Scroll to the new employer pack for this scheme type