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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer returns: capture employer return - up to 2004: capturing return - up to 2004 (Action Guide)

When you are required to capture an annual return, follow steps 1 - 39 below. This Guide is presented as follows

Steps 1 - 4

Steps 5 - 9

Steps 10 - 12

Steps 13 - 15

Steps 16 - 18

Steps 19 - 20

Step 21

Steps 22 - 24

Step 25

Step 26

Step 27

Step 28

Steps 29 - 39

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

Initial action

  1. Review the return for tax year 2003-04 and earlier and decide which of the following classifications apply

Is the return type

  • An Original Complete
  • An Additional Complete
  • A correction
  • A Pro-forma
  1. Where the return is not an original use green ink to note the return type prominently on the return

  2. Use Function CAPTURE EOY RETURN DETAILS to capture the information provided on the return

  • Where processing a P35MT and you do not hold the MT invoice you must enter ‘0’ in the Number of P14s field
  • Where processing a nil form P35 and forms P14 have an entry in column 1a
    • Enter the number of P14s that accompany the return in the Number of P14s field
    • Leave the monetary fields as the pre-populated 0.00
  • Where processing a nil form P35 and there are no forms P14
    • Enter ‘0’ in the Number of P14s field
    • Leave the monetary fields as the pre-populated 0.00
    • Select the [Remarks] button, and then
    • Select the NFP remark so this is displayed on the P228
  1. Where the return is captured successfully go to step 29

Otherwise

  • If the employer / contractor reference cannot be found go to step 5
  • If the year on the employer record to which the return relates is not live go to step 10
  • If the employer record has moved go to step 13
  • If the year is already cleared Cancelled one year only (COYO) or Dormant go to step 16
  • If the receipt of the return has not been recorded go to step 19
  • If the classification of the return being captured is not accepted go to step 21
  • If there is a Tax Credit Funding Discrepancy advisory message go to step 25
  • If a figure of Student Loan Deductions appears on the return but the scheme is not noted as a Student Loan employer go to step 26
  • If you are attempting to capture a form P35MT (for years up to 2004) but a P35MT has already been captured for that year go to step 27
  • If you are attempting to capture a form P35MT (for years up to 2004) but the employer record does not hold the year related indicator P35MT for that tax year go to step 28
  • If a negative amount is entered in the ‘Total NICs’ box (box 3 on P35) contact the Employer Business Service (EBS) Helpdesk (This content has been withheld because of exemptions in the Freedom of Information Act 2000) for further guidance

Employer / contractor reference not found

  1. If the employer reference shown on the return cannot be found on the Employer Business Service (EBS)
  • Use NPS Function Quick Search or Trace and Match (Employer) to search for a valid employer reference
  • If a valid employer reference is found go to step 6
  • If valid employer reference is not found go to step 7
  1. If a valid reference is found
  • Using green ink strike through the invalid employer reference on the return and enter the correct details
  • Use Function RECORD RETURN RECEIPT to record the date the return was received if it has not already been recorded as received at the correct employer reference

If you are processing a form P35MT (for years up to 2004) ensure that the year related indicator ‘P35MT’ is set on the employer record for the relevant year

  1. If the return is not proper to your office
  • Date stamp the front, and
  • Forward it to the correct office
  1. If the return is proper to your Processing Office use Function CAPTURE EOY RETURN DETAILS to capture the return

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29
  1. If you cannot find a valid reference check if the employer’s address is in the area for which your office is responsible
  • If the employer’s address is in your area use Function EMPLOYER SET UP to create a new record, see PAYE20000 onwards for further information

If you are processing a form P35MT use Function AMEND EMPLOYER INDICATORS to set the year related indicator ‘P35MT’ on the employer record for the relevant year

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.

And then in all cases on the next working day, when the record has been updated

  • Use Function RECORD RETURN RECEIPT to record the date the return was received
  • Use Function CAPTURE EOY RETURN DETAILS to capture the return details

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29
  • If the employer’s address is not in your area
    • Date stamp the front of the return with the date of receipt
    • Send the return to the correct Processing Office asking them to set up a new record immediately

EBS shows year not live

  1. If you have been unable to capture the return because the year on the EBS employer record is not live
  • Review the tax year on the return and check that the correct year was entered when capturing
  • If the correct year was not entered use Function CAPTURE EOY RETURN DETAILS again entering the correct year

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29

Otherwise

  1. If the correct year was entered review the information held and satisfy yourself that a live employer record is required for the year on the return
  • If it is required use Function AMEND EMPLOYER SCHEME HISTORY to update the employer record. To
    • Reopen a cancelled employer record - see PAYE21205
    • Change a start date - see PAYE27020
    • Restart a ceased employer record - see PAYE21215

If you are processing a form P35MT (for years up to 2004) use Function AMEND EMPLOYER INDICATORS to set the year related indicator P35MT on the employer record for the relevant year

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.

  1. On the next working day, when the record has been updated

If the receipt of the return has not been recorded at the correct reference

  • Use Function RECORD RETURN RECEIPT to record the date the return was received, and then
  • Use Function CAPTURE EOY RETURN DETAILS to capture the return details

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29

Employer record has moved

  1. If you have been unable to capture a return because the employer record has been transferred, merged out or succeeded
  • Use NPS Function Quick Search or Trace and Match (Employer) to search for a valid employer reference and office number
  • Use green ink to note the new employer reference
  1. If the receipt of the return has not been recorded at the correct reference
  • Use Function RECORD RETURN RECEIPT to record the date the return was received

If you are processing a form P35MT (for years up to 2004) use Function AMEND EMPLOYER INDICATORS to set the year related indicator ‘P35MT’ on the employer record for the relevant year

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.

  1. If the new employer reference is in your office
  • Use Function CAPTURE EOY RETURN DETAILS to process the return details

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field, and then

  • Go to step 29, otherwise
  • Send the return to the new office immediately for capture

Year already cleared COYO or DORMANT

  1. If you are unable to capture a return because the year is already cleared COYO or DORMANT

For COYO cases

  • Use Function AMEND EMPLOYER INDICATORS to remove the COYO indicator

For Dormant cases

  • Use Function AMEND EMPLOYER SCHEME HISTORY to remove the DORMANT indicator

If you are processing a form P35MT (for years up to 2004) ensure the year related indicator ‘P35MT’ is held on the employer record for the relevant year

  • Use Function VIEW EOY RETURNS HISTORY to identify whether receipt of the return has been recorded
    • If receipt of the return has been recorded go to step 18
    • If receipt of the return has not been recorded use Function AMEND EMPLOYER INDICATORS to set the year related indicator NOP35REM, and
  1. On the next working day, when the record has been updated
  • Use Function RECORD RETURN RECEIPT to record the date the return was received, and
  • Use Function AMEND EMPLOYER INDICATORS to remove the year related indicator NOP35REM
  1. Use Function CAPTURE EOY RETURN DETAILS to capture the return details

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29

Return not recorded as received

  1. If you are unable to capture the return because it has not been recorded as received
  • If capturing form P35MT (for years up to 2004) use Function AMEND EMPLOYER INDICATORS to ensure the P35MT indicator is set

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.

  • Use Function RECORD RETURN RECEIPT to record the date on which the return was received, and then
  1. If the return is not proper to your office
  • Date stamp the front of the return
    • Forward it to the correct office immediately, otherwise
  • If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

Use Function CAPTURE EOY RETURN DETAILS to capture the return details

  • Go to step 29

Return class not accepted

  1. If you have been unable to capture the return because
  • An Original Complete return is already captured for this year, or
  • The return has been classed as an Additional Complete and there is no return captured, or
  • The return has been classed as a correction and there is no Original Complete return captured
    • Use Function VIEW EOY RETURNS HISTORY and your papers to identify the correct return class
    • Use Function CAPTURE EOY RETURN DETAILS to capture the return details

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29

Unable to capture CIS Deduction

  1. Whilst processing the return you may find that the ‘CIS Dedns Suffered’ field is not available. When this happens you must
  • Check the entries on the return
    • If the employer has entered an amount in the CIS deduction box go to step 23, otherwise
    • If there is not an entry in the CIS deduction box you have keyed a figure in error
  1. Use Function VIEW EMPLOYER TRADE & SCHEME DETAILS to check the scheme type
  • If the scheme type is PSC or P go to step 25
  • If the EBS record is another scheme type go to step 24
  1. Contact the employer to confirm the correct scheme type
  • If the employer confirms that the return is incorrect agree a correction to the return
    • Go to step 25
  • If the employer confirms that the return is correct use Function AMEND EMPLOYER TRADE & SCHEME DETAILS to update the employer record
    • Do not continue with capture until the scheme type has been updated on BROCS
    • Go to step 29

Tax Credit Funding Discrepancy Message

Note: The following step applies to captured 2001-2003 returns only. Any 2004 captured returns which contain Tax Credit Funding Discrepancies will automatically be included on a new ‘Post Capture’ work list.

  1. Whilst capturing form P35 or P35MT (for years up to 2004) you may be informed that a Tax Credit Funding Discrepancy has arisen. When this happens you must
  • Make a prominent note of the details of the discrepancy on the top of the return, and
  • Ensure the discrepancy is pursued immediately after the return is captured. The Action Guide at PAYE53011 gives details on how you will need to deal with these cases
  • Continue to capture the return

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

  • Go to step 29

Non student loan employer

  1. If you are presented with an advisory message stating the employer is not noted as a Student Loan employer you must
  • Continue to capture the return in the usual way

If you are processing a form P35MT (for years up to 2004) and do not hold the MT invoice you must enter ‘0’ in the Number of P14s field, and

  • Make a prominent note in green ink ‘Not noted as student loan employer’, and then
  • Go to step 29

P35MT already captured

  1. If you are processing form P35MT (for years up to 2004) and the employer record shows that a P35MT has already been captured you must
  • Use VIEW EOY RETURNS HISTORY to identify the correct return type
  • Consider whether the indicator P35ALSO is required, if so set this using Function AMEND EMPLOYER INDICATORS

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.

  • Use Function CAPTURE EOY RETURN DETAILS to capture the P35MT as an additional or correction P35
  • If you do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

Note: It is only possible to capture one P35MT for any one year for an employer record.

P35MT Indicator not set

  1. If the P35MT indicator is not held for the year of the return you will not be able to capture a P35MT

When this happens you must

  • Use Function AMEND EMPLOYER INDICATORS to set the year related indicator

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.

  • Use Function VIEW EOY RETURNS HISTORY to identify whether receipt of the return has been correctly recorded
  • If it is not recorded use Function RECORD RETURN RECEIPT to record the date the return was received, and then
  • Use Function CAPTURE EOY RETURN DETAILS to capture the return

If you do not hold the MT invoice you must enter ‘0’ in the Number of P14s field

Immediate action after capture

  1. Your immediate action after capturing the return depends on the type of return processed. If you have processed form
  • P35 (Offshore Protocol) go to step 30
  • P35 (EP) go to step 31
  • CIS36 or SC35 go to step 32
  • P35(TAS) go to step 33
  • P35 or P35MT (for years up to 2004) go to step 37
  • P35(PS) or P37 go to step 38
  1. When form P35(Offshore Protocol) has been successfully captured you must take the following actions
  • Review the answers on the return
  • Update the ECS record as required
  • Check the correct amount of tax has been deducted
  • Use Function AMEND EMPLOYER NOTES to record your actions
  1. When the form P35(EP) has been successfully captured you must take the following actions
  • Send forms P527 and P528 to the PAYE section, and then
  • File away the return in the annual run of P35 returns
  1. When the form CIS36 or SC35 has been successfully captured you must take the following actions
  • Update the ECS record as required
  • Capture CIS36 return information onto CIS
  • File any Cards SC11 received from the contractor in a separate filing range for each tax year
  1. When the form P35(TAS) has been successfully captured you must take the following actions
  • For basic rate schemes (Section 1 of form P440) go to step 39
  • For untaxed awards to companies and self employed people (Section 4 of form P440) go to step 34
  • For higher rate schemes (Section 3 of form P440) or where the gross value of the award is £1000 or less (Section 2 of form P440) go to step 36
  1. For each entry in the ‘Untaxed awards to companies and self-employed people’ at the foot of the back of form P440
  • Prepare and issue forms 48
  • Note the Processing Office to which you sent each form 48 against each entry on form P440
  1. When you have sent all forms 48 needed enter at the foot of form P440 ‘Forms 48 issued….’ (date)

  2. File forms P35(TAS), P440 and any P440(CS) in the annual run of P35 returns

  3. When the form P35 or P35MT (for years up to 2004) has been successfully captured you must take the following actions

  • Reconcile any Tax Credit Funding Discrepancy immediately - follow the Action Guide at PAYE53011
  • Review the answers on the return
  • Update the ECS record as required
    • If the return has been received after the filing deadline you must set the temporary inhibition signal on ECS on the same day as the return is captured
  • If you are reviewing form P35 go to step 38
  • If you are reviewing form P35MT (for years up to 2004) go to step 39
  1. If you have processed form P35 or P37 you must also use Function VIEW EOY RETURNS HISTORY to identify P228 details for the captured return
  • Record the P239 list number and the P228 consecutive number, and
  • Make a prominent note of these details on the return
  • File the return in a separate range to await the receipt of form P228
  • On receipt of the form P228 you will need to follow the guidance in the Action Guide at PAYE41031
  1. After you have successfully captured the return you must make certain further checks. Follow the Action Guide at PAYE53011