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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer records: modified PAYE schemes: employees seconded abroad - EP Appendix 7B arrangements: NICs Settlement Return (Action Guide)

To deal with the receipt of a NICs Settlement Return (NSR) follow steps 1 - 16 below. The Guide is presented as follows

Steps 1 - 5

Steps 6 - 8

Steps 9 - 15

Step 16

 

Initial action

On receipt of an NSR

  1. Ensure a P35 has been received under the employer’s main PAYE reference

  2. Process any payment in accordance with PAYE50015

  3. Use the e-Filestore to check that the figures in columns D to F on the NSR agree with the P14 NIC figures (Excel 77KB) submitted with the P35 under the employer’s main PAYE reference

  4. Is there a discrepancy at step 3?

  • If yes, go to step 5
  • If no
    • Go to step 6 if the NSR shows an additional amount of NIC due
    • Go to step 9 if the NSR shows a refund of NICs
    • Go to step 16 if the NSR balances or is a nil return
  1. Return the NSR to the employer asking to explain the discrepancy

 

The NSR shows an additional amount of NIC due

  1. Is the amount entered in Column E of the NSR greater than zero?
  • If yes, go to step 7
  • If no, go to step 8
  1. Process the ‘Total NIC settlement amount’ shown on the NSR under the EP Appendix 7B employer reference

  2. Take the following action

  • Process the ‘Total NIC settlement amount’ shown on the NSR under the EP Appendix 7B employer reference
  • Send a copy of the NSR to NICO (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (tick the first box)
  • Issue letter 1 (Word 28KB) to the employer or employer’s representative

 

The NSR shows a refund of NICs

  1. Is the refund of Class 1 secondary and / or primary NICs on earnings above the UEL?
  • If yes, go to step 10
  • If no, go to step 13
  1. Is the refund due to the employer because
  • The NICs was paid by the employer under social security equalisation and without recovery from the employee, or
  • They are supported by mandates authorising refunds to be made to the employer?
    • If yes, go to step 11
    • If no, go to step 12
  1. Take the following action
  • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE employer reference
  • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
  1. Take the following action
  • Send a copy of the NSR to NICO to make the refund(s) to the employee(s) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (tick the first box)
  • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE reference to refund to the employer the secondary NICs shown on column M
  • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
  • Issue letter 2 (Word 23KB) to the employer or employer’s representative
  1. Is the refund of primary NICs between the LEL and UEL and above the UEL due to the employer because
  • The NICs was paid by the employer under social security equalisation and without recovery from the employee, or
  • They are supported by mandates authorising s to be made to the employer?
    • If yes, go to step 14
    • If no, go to step 15
  1. Take the following action
  • Process the NIC refund shown on the NSR under the employer’s main PAYE reference
  • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
  • Pass a copy of the NSR to NICO to update the employees NIC record (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (tick the second box)
  • Issue letter 1 (Word 28KB) to the employer or employer’s representative
  1. Take the following action
  • Pass a copy of the NSR to NICO to make the refunds to the employees (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (tick the first box)
  • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE reference to refund to the employer the secondary NICs shown on column M
  • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
  • Issue letter 3 (Word 24KB) to the employer or employer’s representative

  

The NSR balances or is a nil return

  1. Take the following action
  • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
  • If the NSR shows the primary NICs between the LEL and UEL has altered for any of the employees send a copy of it to NICO to update the employees NIC record (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (tick the second box)