PAYE50961 - Employer returns: employer starter and leaver forms: employer e-file in-year penalties: dealing with appeals against failing to file online (Action Guide)
When dealing with appeals against failing to file online follow steps 1 - 19 below. The guidance is presented as follows
Steps 1 - 2
Step 3
Value of penalty and number of forms
Steps 4 - 7
Filed electronically but also sent duplicate paper form
Steps 8 - 11
Steps 12 - 16
Steps 17 - 19
Initial action
An appeal should be made within 30 days from the date of issue of the notification to the employer.
1. On receipt of the appeal you should immediately record the date the appeal was received and the appropriate appeal type in the ‘appeal’ part of the ECS Penalty Appeal screen.
2. It will also be necessary to view details of paper in-year form submissions on NPS when considering any appeal. The appropriate screen on NPS is ‘Employer Submission’ within ‘ECS Checks’. Enter the dates of the relevant quarter to which the appeal relates. ‘ECS checks menu (Action Guide)’ (PAYE7016) provides guidance on this.
Grounds for appeal
The value of the penalty is linked to the number of transgressions in the quarter. Further guidance on this is available at PAYE50910 and PAYE50935.
3. You need to consider the reason for the appeal. Appeals may be received from employers / agents for the following reasons:
- The employer does not agree with the value of the penalty and the number of in-year forms not submitted electronically during the quarter
- The employer maintains they filed electronically but also sent in a duplicate paper form
- The employer maintains they have not submitted any paper forms during the quarter
- The employer appeals on the grounds of reasonable excuse
Value of penalty and number of forms
The value of the penalty is based on the number of forms the employer fails to file online during a tax quarter. If the employer claims the number is smaller than the value of the penalty suggests you may need to compare their information with the information captured on NPS.
4. You should:
- Ask the employer to provide the name and NINO for each employee for whom they have sent in a paper form during the quarter using appeal letter EAL1 (available in SEES)
- BF the papers for 4 weeks
5. Action on receipt of the response from the employer:
- Access NPS / ECS Checks / Employer Submissions / Employer Submissions Detail for each type of paper form
- Compare the information provided with the Employer Submission Details screen on NPS for each of the forms series
6. Information provided by the employer matches NPS:
- Issue appeal letter EAL2A (available in SEES)
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes and record the action taken and the location of the papers
- B/F for 45 days
- Use ECS Function SELECT EMPLOYER, update the employer notes and informally stand over the penalties for that quarter until the appeal is decided
- If the employer responds with further information, review the case again in light of the information provided
- For action to take in other circumstances continue as in PAYE7006 steps 8 to 10 but use amended SA636 / P45 / P46
7. Information provided by the employer does not match NPS:
- Identify the employees / ex-employees who are not included on the information provided by the employer in the particular quarter
- Copy and paste two items of information relating to these employees / ex-employees onto a Word document following the guidance at PAYE50960 to maintain data security
- Print off and send this information to the employer with appeal letter EAL2B (available in SEES) if the value of the penalty stays the same or increases, or EAL2C if the value of the penalty reduces
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes and record the action taken and the location of the papers
- B/F for 45 days
- Use ECS Function SELECT EMPLOYER, update the employer notes and informally stand over the penalties for that quarter until the appeal is decided
- If the employer responds with further information, review the case again in light of the information provided
- In other circumstances continue action as in PAYE7005, steps 8 to 10 but use amended SA636 / P45 / P46
Filed electronically but also sent duplicate paper form
The capture of paper in-year forms triggers the selection process for in-year forms penalties. When a paper in-year form is captured, NPS carries out a ‘duplicate event’ check. This looks for an electronic notification of the same ‘event’. If the check identifies a duplicate electronic event, the paper submission will not count towards the number of transgressions for the employer during the quarter.
Where a paper in-year form is captured before the duplicate information is filed online or if an in-year form is submitted without a NINO, the duplicate event check will not link the duplicate submissions and the paper form will count towards the number of transgressions during the quarter.
If the employer appeals on the grounds that they filed electronically but also sent in a duplicate paper form, you will need to check the in-year forms information on NPS.
8. Access NPS / ECS Checks / Employer Submissions Detail for each type of paper form, then:
- Enter the individuals’ NINOs into NPS
- Select Contact History
- Check the individuals’ NPS records for a duplicate electronic notification for the event
- If a duplicate electronic notification for the same event has been received, the paper submission should not count towards the penalty calculation
- Follow the examples below, to complete the actions appropriate to each scenario
Duplicate Events - Examples
NPS Employer Submissions screen shows 60 paper forms P45/1 and 60 paper forms P46 have been submitted during the quarter. A penalty of £300 has been charged.
9. Scenario 1 - Both paper and electronic forms submitted for every case.
A review of the employee records shows 60 duplicate notifications, and that in every case both electronic and paper submissions have been received.
The 60 duplicate submissions do not count towards a penalty calculation, and the appeal should therefore be accepted:
- Discharge the penalty
- Record the Appeal Settled date on ECS
- Issue appeal letter EAL5 (available on SEES)
- Set the E-File Temporary Inhibition signal for each quarter until October 2013
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes, record the penalty discharged and add the statement ‘E-File Temp Inhib set to 10/2013 per PAYE50961’
- File the papers away
10. Scenario 2 - The majority of paper forms submitted have been duplicated electronically
A review of the employee records shows 50 duplicate electronic / paper notifications for the same events. The 50 duplicate paper submissions do not count towards the penalty calculation and the number of forms filed incorrectly is 10:
- Discharge the penalty
- Record the Appeal Settled date on ECS
- Issue appeal letter EAL5 (available on SEES)
- Set the E-File Temporary Inhibition signal for each quarter until October 2013
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes, record the penalty discharged and add the statement ‘E-File Temp Inhib set to 10/2013 per PAYE50961’
- File the papers away
11. Scenario 3 - The majority of paper forms submitted have not been duplicated electronically
A review of the employee records shows 20 duplicate electronic / paper notifications for the same events. The 20 duplicate paper submissions do not count towards the penalty calculation and the number of forms filed incorrectly is 40:
- Reduce the value of the penalty to £100 (see PAYE50910 to recalculate the amount of the penalty, based on incorrect submissions received)
- Copy details of the 40 employees for whom in-year form information has not been submitted electronically into a Word document, following the guidance at PAYE50960
- Issue appeal letter EAL4 and the Word document to the employer
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes and record the action taken and the location of the papers
- B/F for 45 days
- Use ECS Function SELECT EMPLOYER, update the employer notes and informally stand over the penalties for that quarter until the appeal is decided
- If the employer responds with further information, review the case again in light of the information provided
- In other circumstances continue action as in PAYE7006, steps 8 to 10 but use amended SA636 / P45 / P46
No paper forms submitted
If the employer maintains he did not send in any paper forms during the quarter, you will need to check the in-year forms information on NPS.
12. Access NPS / ECS Checks / Employer Submissions Detail for each type of paper form, then
- To decide the next action, initially sample check a few individual NPS records:
- If this suggests the employer has submitted duplicate electronic and paper notifications for the same event follow the guidance at steps 9 - 11 above
- If the NPS review suggest there are no duplicate electronic and paper events and you can confirm that the employee works or has worked for this employer follow step 13, in all other cases follow step 15
13. Review the submissions received from the employer during the quarter, to compare the numbers of electronic and paper forms submitted. Where it is evident that the employer has submitted the majority of forms electronically, follow the bullets below, otherwise go to step 14:
- Discharge the penalty
- Record the Appeal Settled date on ECS
- Set the E-File Temporary Inhibition signal for each quarter until October 2013
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes, record the penalty discharged, and add the statement ‘E-File Temp Inhib set to 10/2013 per PAYE50961’
- File the papers away
14. Where the majority of forms have not been submitted electronically:
- Issue appeal letter EAL3 (available in SEES) including details of an employee for whom in-year information has not been submitted electronically, following guidance at PAYE50960
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes and record the action taken and the location of the papers
- B/F for 45 days
- Use ECS Function SELECT EMPLOYER, update the employer notes and informally stand over the penalties for that quarter until the appeal is decided
- If the employer responds with further information, review the case again in light of the information provided
- Continue action as in PAYE7006, steps 8 to 10 but use amended SA636 / P45 / P46
15. Review the submissions received from the employer during the quarter, to compare the numbers of electronic and paper forms submitted. Where it is evident that the employer has submitted the majority of forms electronically, follow the bullets below, otherwise go to step 16:
- Discharge the penalty
- Record the Appeal Settled date on ECS
- Set the E-File Temporary Inhibition signal for each quarter until October 2013
- Use EBS Function AMEND EMPLOYER SUMMARY, access Employer Notes, record the penalty discharged and add the statement ‘E-File Temp Inhib set to 10/2013 per PAYE50961’
- File the papers away
16. Where the majority of forms have not been submitted electronically, and you cannot confirm that the employees have worked for the employer:
- Prepare and send EAL03 including details of an employee for whom in-year form information has not been submitted electronically, but provide only the surname of the employee and the start / leaving date
- Use EBS Function AMEND EMPLOYER SUMMARY access Employer Notes, record the action taken and the location of the papers
- B/F for 45 days
- Use ECS Function SELECT EMPLOYER, update the employer notes and informally stand over the penalties for that quarter until the appeal is decided
- If the employer responds with further information, review the case again in light of the information provided
- In other circumstances continue action as is PAYE7006, steps 8 to 10 but use amended SA636 / P45 / P46
Reasonable excuse
If the employer appeals on grounds of reasonable excuse, this should be considered in line with current reasonable excuse guidance. It is important to note that there is no due date or deadline by which an employer has to submit an in-year form.
17. If you do not accept that reasonable excuse applies, issue form EAL633 (available on SEES)
18. If you are able to accept that reasonable excuse applies:
- Discharge the penalty
- Record the Appeal Settled date on ECS, then
- Use EBS function AMEND EMPLOYER SUMMARY, access Employer Notes and record the action taken and the location of the papers
- File the papers away
19. Late appeals
Late appeals should be considered in line with current reasonable excuse guidance.
If the late appeal is not accepted, write to the employer explaining why and offer them a review if they do not agree the decision.