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HMRC internal manual

PAYE Manual

PAYE operation: specific employments: returning officers

Note: This guidance relates to the operation of Electoral Schemes for tax years up to and including 2013-14. From 2014-15 onwards these schemes will operate under standard PAYE arrangements.

Modified PAYE
Procedure at elections
Action at end of year


Special modified PAYE arrangements for returning officers have been agreed centrally. The acting returning officer or his deputy normally acts as the employer, and is responsible for the deduction of tax at the basic rate. The arrangements are set out below.

Modified PAYE

The employer gives employees the opportunity to confirm that they are not liable to tax by completing form P527. The employer makes payment to those who sign the form without deducting tax.

The employer deducts tax at the basic rate (at UK rate) from

  • Payments for electoral duties
  • Payment for travel between home and place where the electoral duties are performed
  • The employer’s own pay, which is the amount left after payment of fees to deputies or superannuation contributions. (This does not apply in Northern Ireland where the returning officer and deputies are civil servants)

The employer gives each employee a form P528 if tax is deducted and this is sufficient evidence of tax paid for all purposes.

After an election, the employer completes a return for each employee together with a summary.

No forms P45, P46 or P60 are used.

Class 1 National Insurance contributions are not payable on the payments.


Employers will make payment in full where possible and so few repayment claims should arise. Take the following action if you receive a claim

  • Ask the individual for form P528 as evidence of tax deducted (see PAYE20105)
  • Obtain a statement of income for the year of claim, including any Jobseeker’s Allowance or other taxable benefit. If the claim is made during the year, do not make a repayment unless

    • The statement includes an estimate of the income receivable for the year
    • No tax liability arises on this sum
  • Select the appropriate option (lump sum or P53) from the IABD drop down and enter the relevant information into IABD. If the customer has any ‘live’ employments ensure the correct figures are entered in IABD
  • The in-year reconciliation will limit the repayment to the amount of tax on the P528

End of year claims should be dealt with in accordance with Action guide tax40015.

Where a P45 (1), a P60 or a P258 is received that shows a PAYE reference that is clearly not an ELECT scheme you should consider notifying Employers Office for them to consider action to get the employer to correctly show the payments on the P35(EP) and to use the correct reference number in future.

Procedure at elections

When an election is called, the Acting Returning Officer (ARO) notifies the HMRC office of the type and date of the election. The Employers Section must

  • Find out how many forms P527 and P528 the ARO needs and send them to him with a payslip L30(A)CL / L30(B)CL
  • Refer to PAYE49015 about the form P35(EP)

After each election the ARO will send

  • Completed forms P35(EP), P527 and P528 to the Debt Management Office
  • Payment of the tax deducted to the Accounts Office

Action at end of year

At the end of each year, ask the Acting Returning Officer (ARO) to provide a list of all the elections held in the previous 12 months. If there have been any elections not previously notified, follow the instructions above.

After 5 April, the Debt Management Office will send the Employers Section all the forms P35(EP), P527 and P528 received during the year. Part 1(a) of form P35(EP) need not list the names of the employees nor the individual amounts of tax deducted.

Duplicate form P35(EP) needed

Where the ARO asks for a duplicate form P35(EP) because he has lost, spoiled or not received the original the Employers Section should

  • Refer to PAYE49015 and PAYE49016 about issuing the form P35(EP)

Form P35(EP) not needed

If you find that a form P35(EP) issued previously is not required

  • Use BROCS InfoArchive Viewer to check whether a form P35(EP) has already been received for the year
  • Refer to the file to see how many forms P35(EP), if any, are still required for the year
  • Then take action as shown below


  • No form P35(EP) received for the year


1. See Action Guide at PAYE48131


  • Form P35(EP) received for the year
  • No further form P35(EP) required
  • Only one further form P35(EP) required


1. Use Function ISSUE/CANCEL EOY RETURN to cancel the additional P35(EP) return request


  • Form P35(EP) received for the year and more than one further P35(EP) required


1. Send the Debt Management Office a memo explaining the facts