PAYE53011 - Employer returns: employer return work lists: CIS deductions advisory and post capture - up to 2006-07 (Action Guide)

Follow steps 1 - 34 below to deal with work items relating to captured annual returns, for years up to and including 2006 to 2007, included on the:

‘CIS Deductions Advisory’ work list - for years up to and including 2002 to 2003
‘Post Capture’ work list - for years 2003 to 2004 to 2006 to 2007 inclusive

To deal with a work item on the ‘Post Capture’ work list for years 2007 to 2008 and onwards, see PAYE53012.

The Guide is presented as follows

Initial action

Step 1

CIS deductions suffered

Steps 2 - 3

Problems obtaining the CIS data

Steps 4 - 6

Making the CIS compare

Step 7

CIS figure and return disagree

Steps 8 - 9

On receipt of vouchers

Steps 10 - 12

Non verified CIS deductions

Steps 13 - 15

Inputting data into CIS

Steps 16 - 18

Review funding authorised

Steps 19 - 24

Tax credits paid

Steps 25 - 32

Deleting the work item

Steps 33 - 34

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

Initial action

The ‘CIS Deductions Advisory’ work list contains work items for every captured return that contains a positive monetary amount in the CIS deductions suffered field.

The ‘Post Capture’ work list contains work items for every captured return where one or more of the following applies:

There is a positive monetary amount in the CIS deductions suffered field
There is a tax credit funding discrepancy
There is a tax credits paid discrepancy

Notes:

When taking action to deal with a work item on either of these work lists, you must ensure that all post capture checks are worked at the same time
When dealing with a work item on the ‘Post Capture’ work list, you must also ensure that you have considered each reason why the work item has been generated on the work list before you delete the work item

1.Access Function WORKLISTS and select:

Worklist Type ‘CIS Deductions Advisory’ or 'Post Capture' from the drop down menu
Your Organisation Unit number from the drop down menu and highlight the work item(s) you want to make 'Working' next
Select the [OK] button - when asked ‘Do you wish to work the selected item(s)’
Select the [Yes] button

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CIS deductions suffered

2. Use Function VIEW EOY RETURNS HISTORY to ensure that you have received and processed all appropriate returns, and return parts

If you have received all appropriate returns, or return parts go to step 3 -otherwise

Await receipt of the outstanding returns, or return parts, before proceeding with that work item, unless you are dealing with a provisional employer repayment request, in which case see PAYE47106

3. Compare the CIS deductions suffered amount on the captured return(s) with the CIS25 voucher figure held on the CIS system

To do this:

Open the CIS system using Interim Single Sign-On and choose either of the following CIS functions - then
CLERICAL CASEWORKER PROCESSING or CASE MAINTAINER PROCESSING
Select ‘File’ on the toolbar and select ‘Taxpayer’ from the drop down menu
Enter the employer reference, select the [OK] button

Go to step 7

Otherwise, if you encounter problems when entering the employer reference into CIS, which may affect you making the CIS compare, go to step 4

Note: If there has been a merger or succession, add together the CIS25 figures from the CIS system for both the old and the new employer references.

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Problems obtaining the CIS data

4. If you are unable to obtain the employer’s CIS details using the employer reference, enter the Unique Taxpayer Reference (UTR) for the employer, which can be obtained from the following sources:

Use Function VIEW EMPLOYER NOTES and check the employer record pad to review the information recorded (especially form P510)
Corporation Tax (CT) section or file
CIS section

If you have been able to establish the company UTR, and this is not held on the employer’s EBS record, use EBS Function AMEND LIMITED COMPANY & DIRECTOR DETAILS to update the employer record

Go to step 7

Note: When entering a company UTR the office number should be entered in field one. If you do not know the office number for the taxpayer a default of 001 should be entered.

5. If you are unable to find the UTR, or the Accounts Office reference is not found or recognised on CIS:

Contact the employer and request the UTR
Where the employer does not know the UTR, request
Their company registration number (CRN)
And
The date they became a limited company

Use COTAX Function TRCT (Trace Taxpayer) to obtain the UTR based on the information supplied by the employer

Use EBS Function AMEND LIMITED COMPANY & DIRECTOR DETAILS to update the employer’s EBS record with the UTR

Go to step 7

6. Where you establish that the employer was not a limited company for the year of the claim, do not continue to make the compare at this stage:

Contact the employer and advise them that, based on the information you hold, they were not a limited company for the year of the claim and as such they are not eligible to make a claim for CIS deductions suffered on their P35. Inform them that you will be arranging for their P35 to be adjusted accordingly
BF your papers for 4 weeks for a reply

If you receive a reply which states that the employer was in fact an eligible limited company

Refer the matter to the EBS Helpdesk for advice, otherwise

If no reply is received at the BF date or the employer confirms that the claim was made in error

Prepare a pro-forma additional return to reduce the CIS deductions suffered amount to nil

For tax years 2004 to 2005 onwards, use Function RECORD RETURN RECEIPT to record receipt of a pro-forma complete return and ensure you select the RSI2 radio button

For all years, use Function CAPTURE EOY RETURN DETAILS to capture a pro-forma additional return to reduce the CIS deductions suffered figure to ‘nil’

Go to step 33

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7. Within the List Taxpayers screen in CIS, select the line with the appropriate Scheme Identified (001, 002 and so on or EMP) and then select the [Captured Vouchers] button. Enter the relevant tax year ended, ensure the voucher type ‘CIS25’ is selected from the drop down menu, select the [P35 Comparison] button.

If the advisory message ‘This taxpayer is not a company. Do you wish to continue?’ is displayed

Go back to step 6

Otherwise, the P35 Comparison screen will be displayed, compare the figure displayed as ‘Tax Captured from CIS25 Vouchers’ within this screen with the amount of CIS deductions suffered captured from the P35.

If the figures agree or the difference is within 10 per cent of the P35 figure or where the difference is greater than 10 per cent but this amount is less than £300

Accept the claim in full and go to step 13

Otherwise, go to step 8

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CIS figure and return disagree

8. Your next action will depend upon whether the amount held on CIS is greater than the amount shown in the 'CIS deductions suffered' box

If the amount held on CIS is greater than the amount shown in the 'CIS deductions suffered' box

Accept the claim made on the P35

Go to step 13

If the amount shown in the 'CIS deductions suffered' box is greater than the amount held on CIS (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Accept the claim made on the P35

Go to step 13,

Otherwise go to step 9

9. If the amount shown in the 'CIS deductions suffered' box is greater than the amount held on CIS (This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000), you must restrict the amount you enter into CIS, as CIS25 credit, to the amount displayed in CIS:

From the P35 comparison screen in CIS
Enter the figure of CIS credit displayed in CIS
Leave the Additional CIS25 Tax Verified box as 'N'
Select the [Save] button

Telephone the employer and ask them to submit all relevant CIS25 tax payment vouchers or other evidence of CIS deductions to substantiate the claim. There is no hard and fast rule on what is acceptable as evidence of deductions, however, examples may include:

Payslips and / or pay packets given to the subcontractor by the contractor, detailing payments and deductions made

The subcontractor’s paid invoices showing appropriate deductions if these are corroborated by paid cheques

A written contract, or other relevant correspondence, between the contractor and the subcontractor

Note: This contact must be made at the same time as contact is made to resolve any other discrepancy. Do not contact the employer on separate occasions to deal with each aspect you are reviewing.

On receipt of the vouchers go to step 10

If the employer does not have vouchers, or does not reply

Go to step 11

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On receipt of vouchers

10. Access the CIS system. Compare the tax deducted on the vouchers with the total shown on the return and CIS

If the figures agree (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Go to step 13

Otherwise, if after identifying the vouchers missing from CIS (Word 28KB) the figures still disagree but

The total on the vouchers does not cover the discrepancy

Go to step 11

The total on the vouchers does cover the discrepancy

Allow the claim in full

Go to step 13

11. Contact the contractor's processing office and request them to review form CIS36 (Word 31KB)

If form CIS36 corresponds with the amount claimed on the return go to step 33, otherwise go to step 12

12. If the amounts do not correspond, or form CIS36 can not be found, you will only be able to give credit for the amount that has been verified:

Contact the employer again. Advise them that unless they can provide evidence to substantiate the missing vouchers you will only be able to give credit for the verified amount
Refer a copy of the papers with the Voucher Pursuit stencil (Word 45KB) to DMB CIS Unit (Shipley). Include photocopies of the CIS25 vouchers, not the originals
Prepare a pro-forma additional return to reduce the CIS deductions suffered amount to the verified amount

For tax years 2004 to 2005 onwards, use Function RECORD RETURN RECEIPT to record receipt of a pro-forma complete return and ensure you select the RSI2 radio button

For all years, use Function CAPTURE EOY RETURN DETAILS to capture a pro-forma additional return to reduce the CIS deductions suffered figure to the verified amount

Go to step 13

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Non verified CIS deductions

13. Input data into CIS

14. Take a print of the CIS screen

15. Use Function AMEND EMPLOYER NOTES to record your actions and then file the screen print with either the ER pad or, where the original return was a paper P35, in the annual run of P35 returns

Go to step 33

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Inputting data into CIS

Note: If an employer tells you that they have paid Working Tax Credit after 31 March 2006 and / or has carried forward TCF into 2006 to 2007, you should advise the employer to contact the Employer Helpline on 0300 200 3200 (text phone 0300 200 3212).

You must first obtain certain information to resolve the funding discrepancy (Word 26KB). When you have obtained the information

16. Use EBS Function VIEW EOY RETURNS HISTORY to check if the Funding Discrepancy Indicator is set

If the indicator is set, go to step 17

If the indicator is not set go to step 33

17. Compare the captured figure of tax credit funding authorised shown on EBS with the entry made on the P35

If the figures disagree go to step 18

If the figures agree go to step 19

18. The amount you have captured is incorrect. You must

Process a correction return for a Net Adjustment (Word 30KB) amount ,which when added to the previously captured figure, will result in the consolidated position (Word 31KB) being equal to the funding figure entered on the return

At the top of the original return, note in green, the words ‘Correction return processed to correct keying error for TCF’

Where a discrepancy still exists go to step 19

Otherwise go to step 33

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Review funding authorised

19. Use NTC Function VIEW EMPLOYER ACCOUNT to establish the total funding figure received by the employer

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

20. If you will need to investigate the discrepancy by contacting the employer:

Advise the employer that there appears to be a discrepancy between the amount of funding they have entered on their return and the funding figure we hold
Ask the employer to check the final form TC712 received for the year and confirm the amount shown for ‘Total funding in tax year’

Note: Where there has been a merger or succession the ‘Total funding in tax year’ must include the amount shown on the TC712 for both the old and new employer references.

The next action will depend on the response from the employer

If the funding was allocated to a wrong employer reference go to step 21

If the funding should have agreed with the amount on NTC go to step 22

If the employer advises that some of the funding was not used go to step 23

If you are unable to resolve the discrepancy go to step 24

21. If funding was allocated to a wrong employer reference

Establish if the employer references are connected (employer references are connected when they relate to the same employer, legal entity)

If the employer references are not connected

Ask the employer to pay back the amount of funding used against the wrong employer reference. If the employer is unwilling to do this go to step 24

If the employer references are connected and relate to the same employer

Send an email to ‘TCO-BDD,TAL-S1 (TCO Preston 6)’ with the title ‘Movement of Employer Funding request PAYE53011’ and request that the relevant funding is reallocated against the correct employer reference. Note: It is essential that you use the correct email title to allow the TCO to identify these cases.

When the funding has been reallocated go to step 33

22. If you are able to agree that the amount entered onto the return should be the amount shown on NTC

Prepare a pro-forma additional return for a Net Adjustment (Word 30KB) amount ,which when added to the previously captured figure, will result in the consolidated position (Word 31KB) being equal to the funding figure shown on NTC

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Go to step 33

23. If the employer advises that some of the funding was not used in the year

If the year is 2003 to 2004 or 2004 to 2005 and the funding has been used in the following year

Send an email to ‘TCO-BDD,TAL-S1 (TCO Preston 6)’ with the title ‘Movement of Employer Funding request PAYE53011’ and request that the unused funding is reallocated to the following year. Note: It is essential that you use the correct email title to allow the TCO to identify these cases.

When the funding has been reallocated - go to step 33

If the year is 2005 to 2006

Advise the employer that the funding can not be reallocated to 2006 to 2007 and all the funding must be declared on the 2005 to 2006 return

Go to step 33

24. If you have been unable to resolve the discrepancy because

The employer advises that the funding amount entered on the return was correct
or

The employer is unable to agree to a correction to their return
or

You have been unable to contact the employer after at least two attempts at different times on different days

Complete a tax credit recovery stencil (PDF 11KB) and forward to the relevant Debt Management recovery office (DMB) to investigate

Note: If the work item relates to a case where an overpayment disposal instruction is required, you must wait for a response from DMB before proceeding with the overpayment disposal instruction.

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Tax credits paid

On 9 February 2007, all Tax Credit Paid (TCP) entries on the Post Capture work list were removed and archived. Any entries for TCP discrepancies generated after that date will continue to populate this work list but these new cases must only be reviewed where an employer overpayment arises. You must continue to work cases shown on the work lists under the categories ‘TCF’ and ‘CIS’.

Note: In all cases where you are required to investigate an apparent employer overpayment and the employer has paid tax credits, you must continue to reconcile any amounts of ‘TCP’ shown on the relevant P35, even though there may not be an entry for that employer record on the Post Capture work list.

25. Use EBS Function VIEW EOY RETURNS HISTORY to compare the captured figure of tax credit paid shown on EBS with the entry made on the P35

If the figures disagree go to step 26
or

If the figures agree go to step 27

26. The amount you have captured is incorrect. You must

At the top of the original return, note in green, the words ‘Correction return processed to correct keying error for TCP’

Where a discrepancy still exists go to step 27

Otherwise go to step 33

27. Use NTC Function VIEW PVE DETAILS FOR EMPLOYER to establish the total authorised PVE for the year

If the total authorised PVE figure agrees with the amount claimed on the P35, no further action is required in respect of this aspect

Go to step 33

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

28. If you will need to investigate the discrepancy by contacting the employer:

Advise the employer that there appears to be a discrepancy between the amount of tax credits paid entered on their P35 and the figure we hold
Ask the employer to confirm that the amount entered on their P35 agrees with the tax credit notifications received for that employer reference
If discrepancies are identified ask for details of those applicants involved (names, national insurance numbers and PAYE reference numbers quoted on those notifications)

Your next action will depend on the employers’ response

29. If the employer advises the tax credits paid amount entered on the P35 was incorrect (and should have agreed with the total authorised PVE figure shown on NTC):

Agree any amendment to the P35 figure with the employer, when agreement is reached
Prepare a pro-forma additional return for a Net Adjustment (Word 30KB) amount ,which when added to the previously captured figure, will result in the consolidated position (Word 31KB) being equal to the PVE figure shown on NTC

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Go to step 33

30. If the employer advises you that

They have received incorrect tax credit notifications
And

The tax credits paid amount entered on the P35 incorrectly includes payments made to applicants held under another employer reference

You will need to amend both the

PVE figure shown on NTC
And

The tax credits paid amount entered on the P35

Agree any amendment to the P35 figure with the employer

Establish if the employer references are connected. Note: Employer references are connected when they relate to the same employer

If the employer references are unconnected or do not relate to the same employer

Send a form TC681 (available on LFC 2000) to the Employer Liaison Team (in the Tax Credit Office) advising them of the applicants to be removed from the employer reference

Prepare a pro-forma additional return for a Net Adjustment (Word 30KB) amount ,which when added to the previously captured figure, will result in the consolidated position (Word 31KB) being equal to the P35 amount agreed with the employer

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Go to step 33

If the employer references are connected and relate to the same employer

Use NTC Function AMEND PVE DETAILS to move the PVE award for each applicant to the correct employer reference

Note: If, when attempting to move an applicant, the error message ‘Scheme type does not support PVE’ is displayed, you will need to take the following action.

Use EBS Function AMEND EMPLOYER SCHEME DETAILS to change the scheme type:

On the next working day, after the scheme type has changed, use NTC Function AMEND PVE DETAILS to move the PVE award for each affected applicant to the correct employer reference
Send a form TC681 (available on LFC 2000) to the Employer Liaison Team (in the Tax Credit Office) advising them of the applicants to be removed from the employer reference
Prepare a pro-forma additional return for a Net Adjustment (Word 30KB) amount ,which when added to the previously captured figure, will result in the consolidated position (Word 31KB) being equal to the amount agreed with the employer and the PVE figure shown on NTC

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Go to step 33

31. If the employer advises you that

The tax credits paid amount entered on the P35 was correct

And

NTC includes payments made to applicants held under another employer reference

Agree any amendment to the P35 figure with the employer

Establish if the employer references are connected. Note: Employer references are connected when they relate to the same employer

If the employer references are unconnected or do not relate to the same employer

Send a form TC681 (available on LFC 2000) to the Employer Liaison Team (in the Tax Credit Office) advising them of the applicants to be removed from the employer reference

Go to step 33

If the employer references are connected and relate to the same employer

Use NTC Function AMEND PVE DETAILS to move the PVE award for each applicant to the correct employer reference

Note: If, when attempting to move an applicant, the error message ‘Scheme type does not support PVE’ is displayed, you will need to take the following action.

Use EBS Function AMEND EMPLOYER SCHEME DETAILS to change the scheme type:

On the next working day, after the scheme type has changed, use NTC Function AMEND PVE DETAILS to move the PVE award for each affected applicant to the correct employer reference
Send a form TC681 (available on LFC 2000) to the Employer Liaison Team (in the Tax Credit Office) advising them of the applicants to be removed from the employer reference

Go to step 33

32. If you are unable to reconcile the discrepancy with the employer or the employer does not respond to your enquiries

Consider preparing a pro-forma P35 to account for the Tax Credits paid, in accordance with ‘Overpayment notification (Action Guide)’ at PAYE47061

Go to step 33

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Deleting the work item

33. When you have dealt with every aspect for which the work item was generated on the work list, use the [Delete] button to delete the work item from the list

34. Where there is an apparent employer overpayment for the work list item, continue to deal with this in accordance with ‘Overpayment notification (Action Guide)’ at PAYE47061

PAYE Manual

PAYE53011 - Employer returns: employer return work lists: CIS deductions advisory and post capture - up to 2006-07 (Action Guide)

Initial action

CIS deductions suffered

Problems obtaining the CIS data

Making the CIS compare

CIS figure and return disagree

On receipt of vouchers

Non verified CIS deductions

Inputting data into CIS

Review funding authorised

Tax credits paid

Deleting the work item

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PAYE53011 - Employer returns: employer return work lists: CIS deductions advisory and post capture - up to 2006-07 (Action Guide)

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