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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
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Employer returns: employer return - quality checks: form P35 and forms P14 - up to 2004 (Action Guide)

Note: This subject provides details of how to record receipt of employer returns for tax years up to 2003-04.

To carry out the checks required prior to recording receipt of a form P35 and forms P14 for years up to 2004, follow steps 1 - 18 below. The guide is presented as follows.

These checks must be made on the day the return is received.

Step 1

Steps 2 - 7

Steps 8 - 9

Steps 10 - 14

Steps 15 - 17

Step 18

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

 

Form P35 check

  1. Review the return and note any illegible entries to be taken up with the employer
  • Ensure the return is an official P35 employer annual return
  • For returns relating to 2001-02 ensure that no entries are present relating to Class 1A NIC

Note: Photocopies of the official P35 can only be accepted where

    • It is identical to the official form, and
    • The return bears the signature, in ink, of the relevant person

We cannot accept photocopies of the completed forms P35 where the signature is also photocopied

 

Form P14 checks

  1. Randomly select 10 forms P14 for examination. If there are less than 10 forms P14 you must count all of them and compare the total received with the number of entries on the form P35

Note: The machines used to scan forms P14 can only read details on approved forms and photocopies are not acceptable.

  1. Review the selected forms P14 to check if any of the following errors apply
  • The forms submitted are not the correct version for that tax year
  • The Revenue and NICO copies have not been separated
  • There are still perforated strips attached to the forms
  • There is still carbon paper between the copies
  • Any of the following entries are missing
    • Employer name and address
    • Tax Office reference
    • Tax year
    • Employee National Insurance Number
    • Employee name
  • Some entries are faint or are not easy to read
  • Entries are not aligned properly in the boxes or there are overlapping lines
    • Slight misalignments may be accepted if it is clear in which box the figure belongs
    • Gross misalignments must not be accepted
  • There are carbon or ink smudges on the forms that cover some of the entries
  • There are incomplete entries from a dot matrix printer
  • For year 1999-00 and 2000-01 there are entries in boxes 1e and 1f but no entries in boxes 1a, 1b, 1c and 1d
  • For other years there are entries in boxes 1d and 1e but no entries in boxes 1a, 1b, or 1c
  • For years 2001-02 there are entries relating to Class 1A NIC
  • If any of the above errors apply you should take the following action
    • Where you have more entries on form P35 than there are forms P14 received - go to step 4
    • Where you have more forms P14 than entries on form P35 - go to step 5
    • If you can repair any errors found - go to step 8
    • If you need additional information from the employer - go to step 10
    • If you need to return all the items you hold to the employer - go to step 15
    • If no errors are found - go to step 18
  1. Where you have more entries on form P35 than there are forms P14 received
  • Do not record receipt of the return
  • Follow steps 15 - 17 to send back the return immediately as ‘incomplete’. Use the Returning Unacceptable Forms P35 and P14 Letter (Word 26KB)
  • Ask the employer to forward a complete return that includes all forms P14 noted on the P35
  • Advise the employer of any other errors found
  1. Where you have more forms P14 than entries on form P35
  • Identify and separate from the return the forms P14 that are not shown on the P35
  • Contact the employer to resolve the discrepancy. Advise the employer of any other errors that are apparent
  • If you establish that the additional forms P14 should not have been sent with that return dispose of the forms P14 as necessary, otherwise
  • Advise the employer that
    • They must complete an additional return that you will arrange to be issued
    • You will return the forms P14 under separate cover
    • Both the completed Additional Complete return and the forms P14 must be returned to you as soon as possible
  • Use Function ISSUE / CANCEL EOY RETURN to issue the additional return
  1. Write to the employer to confirm the points raised during your conversation
  • Enclose the additional forms P14
  • Retain a photocopy of the forms P14 with a copy of your letter in the employer record pad (unless you need further information from the employer regarding other errors)
  • Ask the employer to return the forms P14 with their completed additional return as soon as possible
  • Request any other outstanding information
  1. If the employer has not made any other errors continue to
  • Date stamp any return, not already stamped, with the date it was received
  • Record receipt of the original return as normal. Follow the Action Guide ‘Recording receipt of employer return’ PAYE41041, otherwise
  • If you can repair the errors found - go to step 8

Repairing errors found

  1. To repair forms P14 or P35, either
  • Strike through the illegible entry on the form P14 and enter in the correct information clearly

Note: You must use green ink for this purpose.
 
Or

  • Prepare a new form P14 to record the correct information

Note: This must be noted ‘Pro-Forma’ and completed in green ink.

  1. If the return is now complete you must
  • Date stamp any return, not already stamped, with the date it was received, and
  • Record receipt of the return. Follow the Action Guide ‘Recording receipt of employer return’ PAYE41041

Contacting the employer

  1. Contact the employer immediately by telephone to
  • Explain why the return is not acceptable
  • Obtain the missing or illegible information
  • Inform the employer that receipt of the return will not be recorded until any missing information is held
  1. Make a note of the call and keep this with your papers

  2. Put all the papers in a separate BF range to await a response from the employer

  3. On receipt of the response from the employer check that the items you now hold make a complete return. If so

  • Date stamp the return

Note: You must use the date the complete return was received as the date of receipt.
 
And

  • Record receipt of the return. Follow the Action Guide ‘Recording receipt of employer return’ PAYE41041
  1. On the BF date if a response has not been received from the employer review any post on hand to ensure that a reply is not held
  • If it is held check that the items you now hold make a complete return. If so
    • Date stamp the return. Note: You must use the date the complete return was received as the date of receipt, and
    • Record receipt of the return. Follow the Action Guide ‘Recording receipt of employer return’ PAYE41041
  • If a reply is not held pass the papers to the Debt Management Office with a report of the action taken asking them to pursue the missing or incorrect information

Send back the return

  1. Strike through using green ink any date stamped on the front of the return

  2. Send back the whole return and any enclosures to the employer immediately and

  • Explain why the return is not acceptable
  • Ask the employer to submit a return in the correct format and / or provide missing information
  • Inform them that this return has not been recorded as a complete return and therefore penalties may accrue under S98A(2) TMA 1970
  1. Use Function AMEND EMPLOYER NOTES to record your actions and then file the papers in the employer record pad. The note must show
  • The date the return was received
  • The reason it is not acceptable
  • The date the return was sent back to the employer

No errors found

  1. If no errors are found on form P35 or forms P14
  • Date stamp any return, not already stamped, with the date it was received, and
  • Record receipt of the return. Follow the Action Guide ‘Recording receipt of employer return’ PAYE41041