Reconcile individual: underpayments: work item 236 - issue request for voluntary payment
Work item 236 is created when an underpayment of £3,000 or more arises or, the underpayment is less than £3,000 but cannot be coded out (PAYE12070) and the individual hasn’t made a voluntary payment and an SA record has not been created. Work item 236 will also be created for underpayments of less than £50.
Interaction with work item 93
As the creation criteria around work item 236 is similar to that applicable to work item 93, in certain circumstances work item 93 may have been created in addition / replacement to work item 236. Where this is so and
- The underpayment that cannot be coded out is an SA underpayment (that is, an underpayment with a source of ‘transferred from CESA’), follow the work item 93 guidance (action guide tax40046 WI093) to clear the underpayment. You should do this whether or not the work item concerned is work item 93 and / or work item 236
- The underpayment that cannot be coded out is a NPS underpayment, follow the work item 236 guidance to clear the underpayment
Where you have both work item 93 and work item 236 open in respect of the same underpayment, at the point at which you commence work on clearing the underpayment you should close the incorrect work item and clear the underpayment by following the appropriate guidance. For example, if both work items are open in respect of an NPS underpayment, you should close work item 93 and follow the work item 236 guidance to clear the underpayment.
From October 2013 you should only get one work item depending on whether the underpayment is an SA underpayment or an NPS underpayment.
Interaction with work item 307
Where work item 307 (reconciliation - voluntary payment held in year) has been created in respect of an underpayment, work item 236 will not be created in respect of the same underpayment.
Work item 236 processing / resolution
At the point at which work item 236 is due to be created, up front processing within NPS takes place to see whether or not the Voluntary Payment Letters (VPL) to be issued within the resolution process can be issued automatically.
In cases where it is not possible to do this work item 236 will be created and the work item will show one of the following creation reasons
- DECEASED INDIVIDUAL
- MANUAL CORRESPONDENCE
- NON DECEASED CAPACITOR
- SUSPENDED P800
- UNDERPAYMENT BELOW TOLERANCE FOR WI236 AND VPL
You will need to follow action guide tax40046 WI236 as appropriate to work the case manually.
In cases where automated VPL processing can be undertaken, work item 236 will not be created immediately and the following processing / timeline will apply
- Within a day or two of the tax calculation concerned being approved, VPL1 (Voluntary Payment Request) will be automatically issued to the customer and / or their agent. When this occurs Contact History will be updated to show that an Outbound ‘VPL1’ has been issued and it will show whether or not the letter was sent to the Individual, Agent or both (in which case two separate notes will be created)
- After a specified number of weeks, where an underpayment remains outstanding and it still cannot be collected through coding, VPL2 (Voluntary Payment Letter - reminder) will automatically be issued. When this occurs Contact History will be updated to show that an Outbound ‘VPL2’ has been issued and it will show whether or not the letter was sent to the Individual, Agent or both (in which case two separate notes will be created)
- After a further specified number of weeks where an underpayment remains outstanding and it cannot be collected through coding, NPS will send the underpayment to SA if the individual is, or has been, in SA. If the individual has an SA record it will be reactivated. If there isn’t an SA record, SA will try to create one. For cases where it has not been possible to reactivate or create an SA record, work item 236 will be created at this point in processing
If the underpayment is sent to SA but rejected work item 236 will be created to allow the case to be manually reviewed. For work item 236 created at this point, the creation reason on the work item will show one of the following reasons
- CESA REJECTED - UTR NOT FOUND
- CESA REJECTED - UTR NOT INDIVIDUAL
- CESA REJECTED - UTR NOT MATCHED
- CESA REJECTED - UTR HAS BANKRUPTCY SIGNAL SET
- CESA REJECTED - UTR IS RLS
- CESA REJECTED - UTR HAS DECEASED INDICATOR SET
- CESA REJECTED - UTR IS NOT AN SA CASE
- CESA REJECTED - ONE OF THE TAX YEARS FOR THE UTR IS NOT AN IN YEAR
- CESA REJECTED - MANUAL RETURN SIGNAL IS SET
- CESA REJECTED - UTR IS LOCKED DOWN
- CESA REJECTED - CLEARED DOWN YEAR VIA NIL CREATE RETURN CHARGE
During the automated process, if the underpayment is paid and / or circumstances change so it can be coded out, nothing remains owing and the process ceases. For example, if the customer pays the full underpayment on receipt of VPL1, VPL2 is not issued and work item 236 is never created.
When reviewing work item 236 you should first consider the following issues.
The time limit for issuing underpayments reduced from 6 years to 4 years on 1 April 2010. As form P800 is an informal calculation and has no statutory force we need to safeguard any tax that we are in danger of not collecting.
This will be
- Where we have notified the customer and they challenge the calculation
- If the tax year is CY-4 and we have not yet notified the customer or proceeded to collect the underpayment
CY-4 underpayments that are established within 12 weeks of the SA deadline (23/12/CY) should only have one request for voluntary payment issued and then B/F the cases for 4 weeks. If payment has not been made by the B/F date the case should be put into SA.
From October 2011 when more than one work item 236 is created for a NINO they will be merged. There may be multiple legacy work items 236.
Underpayments removed from CY code may still have a ‘coded’ status in Accounting so Coding History must be checked for underpayments coded CY.
For underpayments less than £3,000, estimated pay should always be reviewed and updated in accordance with the guidance at PAYE130045, which will ensure underpayments are coded where possible.
In cases where the customer has contacted us prior to work item 236 being reviewed, the estimated pay figure may already have been updated and a Contact History note put on the case of ‘EST pay updated DD/MM/YY - Clear WI236’. Where the note refers to the work item 236 underpayment you are reviewing you should close the work item and take no further action.
Work items 236 created for the following types of underpayment can also be closed without any further action being taken
- Potential underpayment - as we cannot request voluntary payments for potential underpayments
- Underpayments with a ’cancelled’ status in Accounting
- Duplicate work items created for the same underpayment
For a deceased case, where work item 21 has been produced (action guide tax40019 WI021(AA) and / or action guide tax40019 WI021(AO)) you do not need to action work item 236 and you should
- Update the work item with a note of ‘Work item 236 closed: the case will be resolved through work item 21’
- Close the work item
In cases where the customer has already contacted us and you are reviewing work item 236, the underpayment concerned may be working with the Underpayment Support Team (UST) by the time you commence your review of the work item. You will be able to identify whether or not this is so as cases concerned will have an appropriate UST Contact History note on them. Where such a note is on the case being worked you should BF work item 236 for 12 weeks (the UST will clear the work item during their review of the underpayment) and move on to the next work item 236 case requiring review.
Note: If you have cause to review the tax calculation(s) associated to work item 236, and in doing so, you notice that a reason for the underpayment is found to be employer error (for example the employer operated an incorrect code in the year) you must follow the guidance at PAYE90020 before you pursue the customer for the underpayment concerned.
To clear work item 236, follow the guidance in action guide tax40046 WI236 which is available on the Customer Operations Guidance Gateway.