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HMRC internal manual

PAYE Manual

HM Revenue & Customs
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PAYE operation: targeted review forms: reopening earlier years on receipt of review forms

A key element in the review forms approach is to help customers pay the right amount of tax through their code and encourage voluntary compliance. Accordingly, we are less concerned than in the past with confronting customers with small underpayments that may have arisen in those years where we have chosen not to make any checks.

In general, you should not seek to reopen years prior to CY-1 unless information comes to hand which suggests there has been incomplete disclosure or fraudulent or negligent conduct coupled with a tax loss making reopening obviously justifiable.

For this purpose we do not think it is appropriate to have some fixed limit (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . Instead cases should be judged on their merits, with Compliance Managers devising local guidelines to fit this approach.

There is no intention here of relieving customers in any way of their obligation to notify us of changes in their circumstances just because we do not issue annual returns or review forms. There will be cases where you need to modify what you do to fit the circumstances; for example, where a customer voluntarily discloses liability for back years.

If you do decide to make enquiries into earlier years, bear in mind that these should

  • Focus on the specific point(s) at issue
  • Be carried out by correspondence, not through the issue of returns

Where the examination of a review form discloses an overpayment (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , and this is likely to extend into earlier years, you should always advise the customer in a letter and give them the opportunity to claim repayment.