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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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PAYE operation: review of claims and deductions: PSUBS (Action Guide)

Where a claim for professional subscriptions (PSUBS) is received in a letter or a form P810 and shows either a first claim or an increase of £2,500 or more in PSUBS, follow steps 1 - 8 below, as appropriate. This guide is presented as follows.

  Steps 1 - 3
   
  Steps 4 - 8

Initial action

1. Using List 3 check that the professional subscriptions qualify and that the description given is correct and check EBS for notes relevant to the PSUB claim. Use the PSUB Help card entitled ‘Amounts Partly Allowable’ to determine the percentage of the subscription fee which is available for tax relief
   
2. If the professional subscription does not qualify, do not allow the claim. Review CY-1 and if a tax calculation is required include the customer service message ‘P810 received PSUB does not qualify’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘PSUB does not qualify’ and remove from the CY / CY+1 codes
3. If the professional subscription qualifies, write to the customer and ask for evidence of payment. Explain to the customer that the information is needed to support the claim and if we receive no reply the claim will not be allowed
  * Make a Contact History note to record the request for evidence to support the claim
  * Do not amend the code

Reply received

4. If the total PSUB is £2,501 or more, set the case up in Income Tax Self Assessment (ITSA) (or reactivate any dormant ITSA record) and update the record so that a tax return is issued next April for CY
     
     
    ### In all cases
  5. If you are satisfied with the evidence provided
    * Review liability for CY-1
    * If a tax calculation is required include the customer service message ‘P810 claim agreed as’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘PSUB claim agreed as’
    * If a tax calculation is not required, write to the customer and thank them for their co-operation and advise them that a calculation will not be issued
    * Amend the CY / CY+1 codes. Where the individual is liable at the Scottish Rate of Income Tax the tax adjustment will use the appropriate Scottish rate based on the individual’s highest rate of tax. The tax code will include an S prefix to indicate the individual is a Scottish taxpayer.
    * Make a note in Contact History ‘P810 claim agreed as’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘PSUB claim agreed as’
  6. If you disagree with the information provided
    * Write to the customer and advise them
    * Of the PSUB due (include an explanation to show how you arrived at the amount) and your intention to issue an informal calculation for CY-1 and to amend the CY coding
    And that
    * These will be issued in 30 days unless you hear from them further. You should also advise the customer that if they disagree, it will be necessary to issue a tax return. HMRC may then consider opening an enquiry into the completed return to challenge the figures disagreed with. If we do that they will be able to appeal against our conclusions and any additional tax that became due
    * Create a paper BF (PAYE105520) for 8 weeks
    * Make a note in Contact History ‘P810 claim not allowed / revised amount’ available from SEES Office Clerical Assistant, or where the claim was received in a letter, add the note ‘PSUB not agreed / revised amount’
  7. If the customer does not respond by the BF date assume agreement and
    * Issue an informal calculation for CY-1
    * Amend the CY / CY+1 codes. Where the individual is liable at the Scottish Rate of Income Tax the tax adjustment will use the appropriate Scottish rate based on the individual’s highest rate of tax. The tax code will include an S prefix to indicate the individual is a Scottish taxpayer.
    * Calculate the tax adjustment in favour of HMRC or the customer and record this for inclusion on the monthly LOMR report ‘Claims / Non SA Enquiries’
  8. If the customer disagrees
    * Write to customer to explain that a Self Assessment return will be issued as this gives the customer the avenue to appeal
    * Set up the case in ITSA (or reactivate any dormant ITSA record) and issue a return for CY-1
    * Make a note in Contact History ‘Non return - P810 PSUB query’, or where the claim was received in a letter ‘Non return - PSUB query’ and note action taken
    * Do not amend the code