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HMRC internal manual

PAYE Manual

Employer records: maintain employer record: indicators for EOY review

Special circumstances may come to light during the tax year that may result in the need for action prior to the processing of an employer annual return. These may include

  • An employer’s PAYE records being lost or destroyed, for example because of fire or theft
  • You being made aware that the employer has not operated PAYE correctly during the year

A report of the circumstances must be held in the employer record pad, and an indicator must be set on the employer’s computer record to show that action is needed prior to processing any return.

Each indicator is set in Function AMEND EMPLOYER INDICATORS.

Below describes the indicators you may use and the circumstances under which they are set


Indicates that NICO has reported that the employer has a compliance failure

Set on receipt of a report from NICO

INSPRUL - CY-1 to CY-6

Indicates that there is an Inspector’s ruling which will affect the employer’s annual return

LUMPSUM - CY to CY-6; Must not be scheme type XP

Indicates that the employer has been authorised to give provisional tax relief on a lump sum payment

RECONSTRUCT - CY to CY-6; In addition where it is determined that the employer is unable to reconstruct their records, set INSTIND (1) and pass a copy of the report to the Debt Management Office to pursue

Indicates that something has occurred that will affect the annual return from an employer, such as records lost or destroyed

TRADISP - CY to CY-6; Must not be scheme type XP

Indicates that a trade dispute has occurred which affects the annual returns for an employer


Indicates that the employer has failed to operate PAYE correctly