Employer returns: employer starter and leaver forms: employer e-file in-year penalties: exceptions to in-year penalties
This subject is presented as follows
Not all types of employer are liable to an e-file in-year penalty under PAYE provisions for failure to file starter and leaver forms online.
Excluded scheme types
The following schemes are excluded from the In-Year penalty procedures
- XP - Subcontractors only
- DOME - Simplified Deduction Scheme (P37 return)
- DPNI - Direct Payment (including NIC)
- DPGEN - Direct Payment (Tax only)
- DCNI - Direct Collection (NIC only)
- EXAM - Examination Fees
- NORPRO - Norwegian Protocol
- ELECT - Electoral Payments
- TAS - Taxed Award Schemes
- PSS - Profit Sharing Scheme
The following Modified PAYE Schemes are also exempt from the penalty process but they cannot be automatically identified through EBS
- Payment Card Reward
- Barrister’s Senior Clerks and Chamber staff
- Certain Market Research employers - identified by the ‘AMSO’ indicator
- Consular missions
- Certain International Organisations such as International Cocoa Organisation
- INMARSAT (International Maritime Satellite Organisation
- European Centre for Medium-Range Weather Forecasts
To prevent the automatic issue of penalties in these cases, the E-File Permanent Inhibition Signal should be set
- When an employer record is created for the purposes of a modified PAYE scheme
- In day-to-day work where you identify such a scheme
For example, if a penalty is automatically issued in error for such a scheme because the E-File Permanent In-Year Inhibition signal was not set, you should discharge the penalty in full and immediately set the signal.
Once the Inhibition signal has been set, prepare an establishment file so that these can be identified for future changes in the legislation. The establishment file should be retained by the penalty Authorised Officer.
In addition to the above, there are certain circumstances where penalties would not normally be considered and where it is possible for ECS to identify such exemptions, they will be automatically excluded from the penalty process.
The employer records to which this will apply are those where the
- Insolvency indicator has been set (liquidations and bankruptcies)
- Deceased signal has been set
- Record has been merged out or transferred to another reference (the penalty process applies at the new reference)
- Employer record has been cancelled, including cancelled one year only (COYO)
Penalties may apply but will not be automatically issued for an employer in any of the following circumstances
- The address is Returned Letter Section (RLS), where undelivered mail is returned by the Post Office
- The E-File Temporary Inhibition signal is set
- The employer is appealing (on EBS) against the segmentation band allocated to them during the annual segmentation count
In these cases, the employers will be included on an E-File In-Year Exception List (PAYE50955).