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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Employer records: employer record work lists: scheme type review (Action Guide)

To take the appropriate action when there is an entry on the ‘Scheme Type Review’ work list, follow steps 1 - 29 below. The guide is presented as follows

  Steps 1 - 11
   
  Steps 12 - 20
  Steps 21 - 29

Scheme type XP

  You must follow steps 1 - 11 when dealing with employer records that have scheme type XP and live employees

  | || |   | ### Initial Review - type XP | | 1. | Use EBS Function AMEND TRADE AND SCHEME DETAILS to ascertain the scheme type held against the current year | | 2. | Where the scheme type against the current year is P or PSC no further action is required | | 3. | Where the current year is not shown, use EBS Function VIEW EMPLOYER SCHEME HISTORY to determine whether there has been a cessation or cancellation, then take the appropriate action below | |   | * Cessation or cancellation date is shown, no further action is required, otherwise go to step 4 | |   | ### Procedures - type XP | | 4. | Use EBS Function VIEW EMPLOYEES to determine if there are ‘live’ employees | | 5. | Where there are no ‘live’ employees, no further action is required | | 6. | Where there are ‘live’ employees note the basis that these employees are linked by | |   | * PAYE only | |   | * PAYE only with a date of leaving in the future | | 7. | Where any or all of the live employees show ‘PAYE only’ ascertain whether there is a corresponding PAYE Service record for each employee | | 8. | No further action is required if all the employees are either | |   | * PAYE only without a corresponding PAYE Service record
 
Or | |   | * PAYE only with a date of leaving in the future | | 9. | For all other cases determine whether there is a separate employer record with scheme type P or PSC by using one or all of the following | |   | * EBS Function VIEW EMPLOYER AND TRADE SCHEME DETAILS (linked scheme) | |   | * NPS Trace and Match | | 10. | Where there is a separate P or PSC scheme | |   | * Complete and forward Employer Segmentation and Live Employees Stencil 1 (Word 25KB) to the PAYE section asking them to move the employee records that have a PAYE only basis and a corresponding PAYE Service record to the employer record with the P or PSC scheme type | | 11. | Where there is not a separate employer record with scheme type P or PSC | |   | * Use EBS Function AMEND TRADE AND SCHEME DETAILS to amend the scheme type to PSC for the current year by following the guidance at PAYE27037  |

Scheme type ELECT, EXAM, TAS and PSS

  You must follow steps 12 - 20 when dealing with ELECT, EXAM and PSS scheme cases with live employees

  | || |   | ### Initial review - type ELECT, EXAM, TAS and PSS | | 12. | Use EBS Function AMEND TRADE AND SCHEME DETAILS to note whether a scheme type is held against the current year | | 13. | Where the current year is not shown, use EBS Function VIEW EMPLOYER SCHEME HISTORY to determine whether there has been a cessation or cancellation, then take the appropriate action below | |   | * Cessation or cancellation date is shown, no further action is required, otherwise go to step 14 | | 14. | Use EBS Function VIEW EMPLOYEES to identify whether there are any ‘live’ employees | | 15. | Where there are no ‘live’ employees, no further action is required | | 16. | Where there are ‘live’ employees note the basis that these employees are linked by | |   | * PAYE only | |   | * PAYE only with a date of leaving in the future | |   | ### Procedures - type ELECT, EXAM, TAS and PSS | | 17. | For each employee that has a PAYE only basis, check that there is a corresponding PAYE Service record | | 18. | No further action is required if all the ‘live’ employees are either | |   | * PAYE only without a corresponding PAYE Service record
 
Or | |   | * PAYE only with a date of leaving in the future | | 19. | For all other cases, identify the linked employer record with scheme type ‘P’ by using one or all of the following | |   | * EBS Function VIEW EMPLOYER AND TRADE SCHEME DETAILS (linked scheme) | |   | * NPS Trace and Match | | 20. | Complete and forward Employer Segmentation and Live Employees Stencil 1 (Word 25KB) to the PAYE section asking them to move the employee records that have a PAYE only basis and a corresponding PAYE Service record to the employer record with the P scheme type |

Scheme type DCNI, DPGEN and DPNI

  You must follow steps 21 - 29 when dealing with DCNI, DPGEN and DPNI scheme cases with more than one live employee
     
     
    ### Background
    An employer record is created with a scheme type of DCNI, DPGEN and DPNI to enable an employee to deduct their own tax and / or NIC. There must only be one ‘live’ employee linked to this employer record. The ‘live’ employee and the employer name must be the same
    If two individuals work for a company with no UK presence, each individual is responsible for deducting their own tax and / or NIC. Consequently, an employer record is required for each individual
    If an individual who is deducting their own tax and / or NIC starts to employ someone and the payments are above the lower earnings limit or their total PAYE exceeds the PAYE threshold, an employer record, with scheme type P, must be opened so that PAYE can be correctly operated
    The following review and procedures will help you determine whether
    * Further action is required
    * The employer record has the correct scheme type
    * The employer record has live employees that require merging
    * The employer record has live employees that are correctly linked
    * There should be a PAYE scheme in addition to the DP / DC scheme
    * There should be a DP / DC scheme for each live employee
    ### Initial Review - Scheme type DCNI, DPGEN and DPNI
  21. Use EBS Function AMEND TRADE AND SCHEME DETAILS to ascertain and note the scheme type held against the current year
  22. Where the scheme type against the current year is other than DCNI,DPGEN and DPNI, no further action is needed
  23. Where the current year is not shown, use EBS Function VIEW EMPLOYER SCHEME HISTORY to determine whether there has been a cessation or cancellation
    * If a cessation or cancellation date is shown, no further action is required, go to step 24
    ### Procedures - Scheme type DCNI, DPGEN and DPNI
  24. Use EBS Function VIEW EMPLOYEES to determine if there are any live employees
  25. Where there are no live employees, no further action is required
  26. Where there is one live employee and this corresponds with the employer name, no further action is required
  27. For all other cases use the following to determine whether the correct scheme type has been allocated to the current year
    * EBS Function VIEW EMPLOYER AND TRADE SCHEME DETAILS
    * EBS Function EMPLOYER NOTES
  28. If the scheme type has been incorrectly allocated, use EBS Function AMEND TRADE AND SCHEME DETAILS to amend the scheme type for the current year
  29. If the scheme type has been correctly allocated, use EBS Function VIEW EOY RETURNS HISTORY to determine and note how many forms P14 have been submitted with the latest return, then select the appropriate action from the list below
    If one P14 submitted with the latest return and there are more than two different live employees
    * Complete Employer Segmentation and Live Employees Stencil 2 (Word 27KB) asking the PAYE section to update the employee record(s) that do not correspond with the employer name using today’s date as the date of leaving
    If one form P14 submitted with the latest return and there are two live employee records for the same individual
    * Forward a request to the appropriate PAYE section asking them to merge the taxpayer records
    Where all the following match - two (or more) forms P14, two (or more) live employees and the employer name includes the two (or more) individuals names
    * Use EBS Function EMPLOYER NOTES to determine whether each individual is responsible for their own tax, and if so
    * Use EBS Function EMPLOYER SET UP to create a new scheme allocating scheme type DCNI, DPNI or DPGEN for one of the individuals
    * Use EBS Function AMEND EMPLOYER SUMMARY to update the employer name on the original employer record
    * Arrange for the employee record to be moved to the corresponding employer record
    * Advise the individuals of the actions you have taken
    Where forms P14 have been submitted for live employees who are employed
    * Use EBS Function EMPLOYER SET UP to create a new employer record with scheme type P
    * Complete Employer Segmentation and Live Employees Stencil 1 (Word 25KB) asking the PAYE section to move the employee record(s) to the new scheme, apart from the employee record that corresponds with the employer name of the existing scheme
    * Contact the employer to explain the actions you have taken