Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer returns: employer return post capture: tax table check (Action Guide)

Note: DOME schemes became standard P schemes from 6 April 2014. This guidance refers to all years up to and including 2013-14.

To check the tax deducted on form(s) P14 or card(s) P12, follow steps 1 - 14 below. The Guide is presented as follows

  Step 1
   
  Steps 2 - 10
  Steps 11 - 14

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

Choosing your action

1. Before you commence your review you must use the appropriate method to check the tax deducted by the employer
   
  * If you are reviewing card(s) P12 you will require the Simplified Tables card P16 for the year you are checking
  * Go to step 11
  * If you are reviewing form(s) P14 for a year prior to CY-1 you will require a copy of the Tax Tables for the year you are checking
  * Go to step 2
  * If you are reviewing form(s) P14 for CY or CY-1 you will normally use NPS Function Quick Search or Trace and Match (see ‘Tax tables’ at PAYE71035 for more information) with the following exceptions
  * If the payments are made free of tax
  Or
  * The circumstances identified at step 2

Reviewing form(s) P14

| 2. | Check each form P14 | || |   | * If it shows the final tax code as Week 1 / Month 1 basis, or the following circumstances apply, you can not check the tax deducted | |   | * Code FT in operation (historically used for some farm workers) | |   | * ‘Week 53’ box shows ‘X’, ‘54’ or ‘56’ | |   | * ‘Refund not made’ is shown against ‘Total tax deducted’ | |   | Otherwise | |   | * Go to step 3 | | 3. | For each form P14 | |   | * Use the pay and final tax code to either check the details using Function TT or manually using the Tax Tables. Use Week 52 or Month 12
 
Unless there is a date of leaving, in which case | |   | * Use the week or month in which the employee left | |   | When you have made the check use Function VIEW EMPLOYER INDICATORS to check whether the TRADISP year-related indicator has been set on the employer record | |   | * If it has not been set go to step 4 | |   | * If it has been set go to step 8 | | 4. | If the TRADISP indicator is not set | |   | * If the figure of tax calculated is the same as the figure shown on form P14 go on to the next form | |   | Otherwise, if the figures differ | | 5. | Use Function VIEW EMPLOYER INDICATORS to check whether the LUMPSUM indicator has been set on the employer record | |   | * If it has not been set go to step 6 | |   | * If the indicator has been set, use Function VIEW EMPLOYER NOTES and check the employer record pad to review the information recorded, review any PAYE Section report of provisional relief held and attach a copy to the return | |   | * If the amount of provisional relief explains the discrepancy go onto the next form P14 | |   | Otherwise enter ‘Lump Sum’ as the ‘Reason for discrepancy’ | |   | * Go to step 6 | | 6. | Enter on form P227 | |   | * The details from form P14 with the amounts under-deducted / over-deducted
 
And | |   | * The ‘Reason for discrepancy’ if known | | 7. | Check form P14. Does it show an entry for ‘Arrears of pay’? | |   | * If there is not an entry go onto the next form P14 | |   | * If there is an entry use Function VIEW EMPLOYER NOTES and check the employer record pad to review the information recorded, review any PAYE Section report of provisional relief held and attach a copy to the return | |   | * If the report shows a figure of tax that explains the discrepancy go onto the next form P14 | |   | Otherwise, if there is not a figure of tax to explain the discrepancy | |   | * Enter on form P227 the details from form P14 with the amounts under-deducted / over-deducted | |   | * Enter ‘Arrears of Pay’ as the ‘Reason for discrepancy’ | |   | * Go onto the next form P14 | | 8. | If the TRADISP indicator is set, compare the tax calculated with the figure shown on form P14 | |   | * If the figure of tax calculated is equal to the figure shown on form P14 go onto the next form P14 | |   | * If the figure of tax calculated is less than the figure shown on form P14 go to step 9 | |   | * If the figure of tax calculated exceeds the figure shown on form P14 write the following details on form P227, then go to step 9 | |   | * The details from form P14 | |   | * The amount of under-deduction | |   | * ‘Trade Dispute’ as the ‘Reason for discrepancy’ | | 9. | Check form P14. Does it show an entry for ‘Arrears of pay’? | |   | * If there is not an entry go onto the next form P14 | |   | * If there is an entry use Function VIEW EMPLOYER NOTES and check the employer record pad to review the information recorded, obtain and review the PAYE Section report of provisional relief held and attach a copy to the return | |   | * If the report shows a figure of tax that explains the discrepancy go onto the next form P14 | |   | Otherwise | |   | * Enter on form P227 the details from form P14 with the amount under-deducted / over-deducted | |   | And | |   | * Write ‘Arrears of Pay’ as the ‘Reason for discrepancy’ | |   | * Go on to the next form P14 | | 10. | When you have reviewed all forms P14 | |   | * Write ‘Forms P14 checked with Tax Tables’ in red ink at the top of the return | |   | * If you have prepared a form P227 follow action guide tax40107 | |   | * If you have not prepared a form P227 continue to capture the return - follow the appropriate Action Guide, see ‘Capturing annual returns - 2005 onwards (Action Guide menu)’ at PAYE43011 |

Reviewing card(s) P12

11. Check each card P12
   
  If the employer has added up the figures for each quarter incorrectly
  * Use green ink to neatly strike through the incorrect figure(s) so that they can still be read
  * Enter the correct figure(s) above or beside them
  * Prepare a note headed ‘Employer’s arithmetical error’ and enter the employer’s name and reference number
12. Compare the amount deducted for each payment on card P12 with the amount due according to Simplified Tax Table Card P16
  For each incorrect amount, enter on form P227
  * The details from card P12
  * The amounts under-deducted / over-deducted
13. When you have reviewed all cards P12
  * Write ‘Cards P12 checked with Tax Tables’ in red ink at the top of the return. If you have prepared a note because a quarterly total was
  * Underpaid - go to step 14
  * Overpaid - advise the employer that you will contact them regarding the overpayment in due course, see PAYE47061
14. * If you have prepared a form P227 for underpaid tax follow action guide tax40107
  * If you have not prepared a form P227 continue to capture the return - follow the appropriate Action Guide, see ‘Capturing annual returns - 2005 onwards (Action Guide menu)’ at PAYE43011