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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
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Employer returns: capture employer return - up to 2004: capturing annual return - up to 2004

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

This subject consists of the following

Background

It is vital that the details reported on a return are captured accurately.

All returns must be captured on the Employer Business Service (EBS) using Function CAPTURE EOY RETURN DETAILS.

The function may be used to capture details for any tax year between CY-1 and CY-6 inclusive or for earlier years between CY-7 and 1990 inclusive.

Return types

There are various methods an employer can use to submit returns that make up the EOY series. These are

  • Manually by sending a paper return
  • By magnetic media
  • Filing Online using PAYE Online for Employers - Internet (formerly known as FBI) or PAYE Online for Employers - EDI (Electronic Data Interchange)

The details of returns submitted in any of the above formats are captured on EBS as one of three basic return types

  • CIS36 - A contractor return including return type SC35
  • P35MT - Returns received on magnetic cassette and captured from a P35 invoice. Note: P35MT return is withdrawn for tax years 2004-05 onwards.
  • P35 - All other returns are captured under this return type

Returns are classified in one of three ways

  • Original Complete
  • Additional Complete
  • Correction

Details of a captured return are sent, usually overnight, from EBS to BROCS, NPS, and ECS.

Capturing correction returns

When a correction return is received after an Original Complete return has been captured this indicates that the first return was incorrect and the following should be considered

  • Where it is considered that the employer did not take reasonable care in preparing the original complete return, both the correction and additional complete returns should be passed to the nominated penalty officer
  • Where an employer routinely submits more than one paper return for a PAYE scheme each year and they do not submit by magnetic media, this should be discouraged
  • Correction returns must show the figures to be put right and by how much. The employer must submit a correction P14. If a replacement P14 is received this should be returned to the employer

Further information can be found at PAYE42014.

Capturing multiple returns

An employer is required to send one complete return in any given year for the same employer record, except where

  • Employers submit both a P35 paper annual return and a P35MT

And

  • Employer records set up as PSC scheme types where a P35 and CIS36 are expected

Employers completing both normal and magnetic media returns

For years up to 2003-04 there may be occasions where an employer wants to submit annual returns both on paper and using magnetic media. This may arise where an employer wants to differentiate between two types of employee. For example where an employer wants to provide separate returns for monthly and weekly staff or directors and employees. When this arises you must ensure that the correct indicators have been set on the employer record. These are

  • P35MT

And

  • P35ALSO

Note: The Magnetic Media indicators were withdrawn on 6 April 2004, and are only applicable to employers who were registered as magnetic media submitters before this date.

Each return must be captured separately.

Note: Whichever return you capture second must be treated as an ‘additional’ return.

PSC scheme types

Employers who employ both employees and subcontractors are required to complete both a P35 and a CIS36 annual return. For tax years up to 2003-04 these returns should normally be captured at the same time as one transaction. Where this is not possible the second return when received must be captured as an ‘Additional Complete’ return.

Exceptions to capturing a return

A return cannot be captured if any of the following apply

  • The employer reference cannot be found
  • A Banking Operations Accounts Office Reference is not held on the EBS record
  • The scheme was ceased or cancelled in a previous year
  • The year has been cleared dormant
  • The start date is later than CY-1
  • The scheme was transferred out, succeeded by or merged out in a previous year
  • The year has been cleared cancelled one year only
  • No return of that type in that year has been recorded as receipted
  • For an ‘Original Complete’ return when an ‘Original Complete’ has been recorded for that year
  • For ‘Additional Complete’ or correction returns, no ‘Original Complete’ return has been captured
  • For a P35MT - a form P35MT has previously been captured
  • If a negative amount is entered in the ‘Total NICs’ box (box 3 on P35)

The Action Guide at PAYE42012 explains how to capture a return and what checks are required before and after capture.