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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer records: modified PAYE schemes: expatriate employees - EP Appendix 7A arrangements: NICs Settlement Return (Action Guide)

On receipt of a NICs Settlement Return (NSR) follow steps 1 - 15 below. The Guide is presented as follows

Steps 1 - 4

Steps 5 - 7

Steps 8 - 14

Step 15

Initial action by Personal Tax International

On receipt of an NSR

  1. Ensure the Expat database is noted and that there is a corresponding Employment Procedure (EP) Appendix 6 agreement in place

  2. Use the e-Filestore to check that the figures in columns 4 to 6 on the NSR agree with the P14 NIC figures (Excel 77KB) submitted with the P35 under the EP Appendix 6 PAYE Employer reference

  3. Is there a discrepancy at step 2?

  • If yes, go to step 4
  • If no
    • Go to step 5 if the NSR shows an additional amount of NIC due
    • Go to step 8 if the NSR shows a refund of NICs
    • Go to step 15 if the NSR balances or is a nil return
  1. Take the following action
  • Return the NSR to the employer asking to explain the discrepancy
  • Process any payment in accordance with PAYE50015

The NSR shows an additional amount of NIC due

  1. Is the amount entered in Column 5 of the NSR greater than zero?
  • If yes, go to step 6
  • If no, go to step 7
  1. Pass the NSR to the PAYE Employer Office to process the ‘Total NIC settlement amount’ (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  2. Take the following action

  • Pass the NSR to the PAYE Employer Office to process the ‘Total NIC settlement amount’ (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • 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 4 (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 9
  • If no, go to step 12
  1. Is the refund due to the employer because
  • The NICs were paid by the employer under social security equalisation and without recovery from the employee, or
  • The NSR is supported by mandates authorising refunds to be made to the employer?
    • If yes, go to step 10
    • If no, go to step 11
  1. Take the following action
  • Pass the NSR to the PAYE Employer Office (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to
    • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the EP Appendix 6 PAYE employer reference (tick the third box), and
    • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7A employer reference. (Tick the fifth box)
  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)
  • Pass the NSR to the PAYE Employer Office (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to
    • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the EP Appendix 6 PAYE Employer reference to refund to the employer the secondary and Class 1A NICs shown on columns 17 and 18 (tick the fourth box), and
    • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7A employer reference. (Tick the fifth box)
  • Issue letter 5 (Word 27KB) 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 were 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 13
    • If no, go to step 14
  1. Take the following action
  • Pass the NSR to the PAYE Employer Office (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to
    • Process the NIC refund under the EP Appendix 6 PAYE employer reference (tick the third box), and
    • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7A employer reference. (Tick the fifth box)
  • Send 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 4 (Word 28KB) to the employer or employer’s representative
  1. Take the following action
  • Send 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)
  • Pass the NSR to the PAYE Employer Office (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to
    • Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the EP Appendix 6 PAYE employer reference to refund to the employer the secondary and Class 1A NICs shown on columns 17 and 18 (tick the fourth box), and
    • Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7A employer reference. (Tick the fifth box)
  • Issue letter 6 (Word 28KB) to the employer or employer’s representative

The NSR balances or is a nil return

  1. Take the following action
  • Ask the PAYE Employer Office to use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7A 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)