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HMRC internal manual

PAYE Manual

Employer returns: employer return - overpayments: PAYE advance (PAD) payments

When a provisional employer repayment is appropriate, the relevant Employer Unit will complete a form P565 and send it to Banking Operations to issue the repayment.

Where insufficient payments are held on the employer’s BROCS record for the repayment year, Banking Operations will issue a PAYE advance (PAD) to repay the employer.

A PAD can only be made from current year (CY) and is cleared when Banking Operations reallocate payments against it from the previous year (CY-1), usually when the CY-1 return is processed and an overpayment is generated.

To avoid duplicate repayments being made to employers, you must use Function VIEW BROCS to ensure that any PAD shown on the employer’s BROCS record has been settled prior to considering a repayment.

The following examples show how a PAD may be dealt with and how it will be shown on the BROCS record

Where no payments have been received for year of the provisional repayment 

Year CY-1 P565 Provisional Repayment request £500 sent to Banking Operations
   
Year CY-1 BROCS Format 3 Postings Summary - no payments received
Year CY Banking Operations issue PAD £500
BROCS Format 3 shows posting ‘PAD £500.00 M’    
  Year CY-1 P35 subsequently processed - overpayment £500
  Year CY-1 Banking Operations reallocate £500 to CY to clear the PAD
BROCS Format 3 shows posting ‘REA £500.00 M’    
  Year CY BROCS Format 3 shows posting ‘REA £500.00’

Where some payments have been received for year of provisional repayment but not sufficient to cover the entire amount required 

Year CY-1 P565 Provisional Repayment request £500 sent to Banking Operations
   
Year CY-1 BROCS Format 3 Postings Summary - £200.00 payment received

Banking Operations put £200 to Overpayments to repay

BROCS Format 3 Postings Summary - ‘D/O £200.00 M’ (amount put to overpayments)    
  Year CY Banking Operations issue PAD £300 (balance of provisional repayment)
BROCS Format 3 shows posting ‘PAD £300.00 M’    
    Employer receives one repayment cheque totalling £500
  Year CY-1 P35 subsequently processed - overpayment £300
  Year CY-1 Banking Operations reallocate £300 to CY to clear the PAD
BROCS Format 3 shows posting ‘REA £300.00 M’    
  Year CY BROCS Format 3 shows posting ‘REA £500.00’