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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer returns: employer starter and leaver forms: employer e-file in-year penalties: manually inhibiting penalties

A penalty can be prevented from being issued automatically by ECS by setting a penalty inhibition signal in ECS.

There are two types of penalty inhibition

  • Temporary

And

  • Permanent

E-File Temporary Inhibition signal

This signal

  • Can only be set by the person nominated as an Authorised Officer

And

  • Is set on ECS

Setting this signal will inhibit the issue of penalties for the year and quarter specified only. If this signal is later unset for the same year, the case will be included in the automatic penalty process for the remaining tax quarters in that year.

Cases which have been temporarily inhibited will be included in the E-File In-Year Exception Lists which are displayed on screen in ECS.

E-File Permanent Inhibition signal

This signal

  • Can only be set by the person nominated as an Authorised Officer

And

  • Is set on ECS

Setting this signal will result in the employer being permanently excluded from the penalty process.

This signal should be set in cases where ECS is unable to identify from information passed to it from EBS and the PAYE Service that the case is excluded from EOY penalties. For example

  • Employers with diplomatic immunity
  • Payment card reward schemes

Cases that have been permanently inhibited will not be included on the exception list that is created on ECS for further manual review.