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HMRC internal manual

PAYE Manual

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HM Revenue & Customs
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Reconcile individual: end of year reconciliation: reconciliation summary screen

The Reconciliation Summary screen will show the results of the reconciliations that have taken place for each tax year. The latest reconciliation position for each year will be shown. As such, there may be circumstances where the Reconciliation Summary screen shows a final status of ‘Reconciled - Balanced’ but tax calculations (P800) for the year have been issued in respect of an earlier reconciliation result. The reconciliations concerned will normally have taken place on different dates (with the ‘Reconciled - Balanced’ calculation being the later date) but there may be exceptional circumstances where this is not so. In either event you will need to review all reconciliations undertaken for the year to determine those for which a tax calculation (P800) was issued.

The screen shows the results of reconciliations only and where the customer is overpaid or underpaid outside tolerances for a year, you will need to review their Accounting (PAYE98000) records to determine how the overpayment / underpayment concerned has been dealt with.

If an in-year reconciliation has taken place and there are no further reconciliations for that year the in-year reconciliation position will be shown.

If a reconciliation has not taken place in a particular year, the Tax Year field will be populated but other fields for the year concerned will be blank.

For cases where a year prior to CY-1 is open (for example CY-2) and CY-1 holds all information required to reconcile, where

  • The PAYE Service automatically triggers the CY-1 reconciliation

    • Details of the CY-1 Tax Calculation will be retained on the customer’s record
    • The result of the calculation will display in the Tax Calculation and Reconciliation Summary screens
  • Reconciliation for CY-1 is triggered manually

    • Details of the CY-1 Tax Calculation will be retained on the customer’s record
    • You will be returned to the Reconciliation Summary screen in which a message of ‘The Tax Calculation cannot be issued because a previous year has not been reconciled’ will be displayed
    • The result of the calculation will display in the Tax Calculation and Reconciliation Summary screens

In both instances the calculation is a ‘working sheet’ only at this stage and it will not be issued to the customer. The year is however ready to be reconciled when calculating the customer’s liability up to date and the system will do this automatically by including CY-1 in a multiple year reconciliation (PAYE96201) at the time the ‘open’ year(s) prior to CY-1 can be reconciled.

For re-reconciliations, at the point at which you trigger the reconciliation(s), you may receive an online message of ‘The system cannot re-reconcile the same tax years as previously reconciled. Further investigation required’. The message is received as the system is unable to re-reconcile all years that have previously been reconciled due to one of them no longer being ripe for reconciliation. One example of this would be where a year previously reconciled now holds a non RTI employment record for which the associated P14 is not held. To clear the message and undertake the re-reconciliation you will need to

  • Review all current reconciliations from the year you are re-reconciling onwards
  • Establish the year(s) that are preventing the re-reconciliation
  • Correct the year(s) to allow them to be re-reconciled (for example, in the case of a missing P14 where you hold the P60 you should capture the P60 details onto NPS)
  • Re-trigger the re-reconciliation starting from the appropriate year

For cases where the customer is underpaid and the underpayment cannot be collected through their PAYE code (PAYE90001) you will receive an advisory message of ‘The underpayment cannot be coded as it exceeds £3000’. The message is received for cases where the underpayment that cannot be coded is less than £3,000 as well as more than £3,000.

The rest of this subject is presented as follows

Date field

The Date field displays the date on which the reconciliation was triggered.

Tax Year field

The Tax Year field displays the year the reconciliation refers to.

Status field

The Status field displays the reconciliation result applied to the year, for example ‘Reconciled - Overpaid’.

Amount field

With the exception of SA underpayments arising in migrated years (see PAYE93095), the Amount field displays the amount the customer is underpaid / overpaid in the year in isolation. Where the reconciliation concerned was undertaken as a single year reconciliation, the amount will be an underpayment where the Status field shows the year was ‘Reconciled - Underpaid’ and an overpayment where the year was ‘Reconciled - Overpaid’. However, this will not necessarily be the case where the year was reconciled as part of a multiple year reconciliation (PAYE96201) and for these, you will need to use the Cumulative Amount figures or view the tax calculation concerned to determine whether or not the Amount field displays an underpaid or overpaid amount.

Cumulative Amount field

The Cumulative Amount field displays the cumulative year end amount. Where the tax year the reconciliation details refer to was

  • Migrated from COP, the Cumulative Amount field will be blank
  • Done on the PAYE Service as a single year reconciliation and the customer is overpaid for the year, any repayment supplement arising will not be included in the Cumulative Amount field and you will need to review the appropriate Accounting records for details of the amount arising
  • Part of a multiple year reconciliation undertaken on the PAYE Service, where the customer is overpaid for the year in isolation for the year being reviewed and the year end result is that they are

    • Overpaid, any Repayment Supplement arising in the year will be included in the Cumulative Amount field and details of it will be held / visible in the appropriate Accounting records
    • Underpaid, any Repayment Supplement arising in the year will be included in the Cumulative Amount field but details of it will not be held / visible in the appropriate Accounting records

Date Paid field

Where the year end result is an overpayment outside tolerance (PAYE93075) and the amount concerned is not carried forward to a later year, the Date Paid field displays the date on which the overpayment was repaid to the customer.

Year Coded Out field

Where the year end result is an underpayment outside tolerance (PAYE93075), the amount concerned is not carried forward to a later year and the underpayment arising can be collected through an adjustment in the customer’s code, the Year Coded Out field displays the year in which the underpayment was coded. Where the underpayment was collected over more than one year, the Year Coded Out field displays the last year in which it was / will be coded.

Residency field

The Residency field is a read only field. It is only completed, with ‘Scottish’, if the customer was a Scottish Taxpayer for that year. The entry in this field is automatically reviewed by system when the customer changes their address. The system recalculates the residency status based on the length of time spent/expected to spend in each part of the UK for the year and updates this field if necessary.

The Scottish rates only apply from 2016-17 onwards. See PAYE100035 for more information on Scottish Income Tax.

SA Year field

The SA Year field is a read only field and it indicates the year(s) in which the customer is considered to be an SA case. Where SA applies to a year the associated value in the SA Year column will be set to ‘Y’ and for a year where it does not apply it will be blank.

Inhibit field

The Inhibit Field displays an indicator to show whether or not automatic reconciliation of the year has been inhibited. Further details of the indicator are given below under the heading ‘Allow Inhibit Automatic Reconciliation action link’.

View Record icon

The View Record icon allows you to view the tax calculation(s) undertaken in the year. Where you select the icon

  • If only one calculation is present for that tax year then you will be taken straight to the Tax Calculation screen
  • If more than one tax calculation exists for the selected tax year then you will be taken to the Tax Calculation Choice screen where you can choose the tax calculation you want to view by selecting the View Record icon to the right of the relevant calculation. This will then take you to the Tax Calculation screen

If you want to prevent a year from being reconciled automatically by the system, you can set the ‘Inhibit Automatic Reconciliation’ signal. To do this you must

  • Select the relevant tax year from the drop down menu
    And
  • Select the Allow Inhibit Automatic Reconciliation action link

This will set the ‘Inhibit Automatic Reconciliation’ signal and set the value in the Reconciliation Summary screen Inhibit column to ‘Y’.

If you need to prevent reconciliation for more than one year then you must repeat this process for each year for which you want to prevent reconciliation.

Note: Where you inhibit automatic reconciliation for a year you must update Contact History with an appropriate note as to why reconciliation has been inhibited.

If you want to allow reconciliation for a tax year that has the ‘Inhibit Automatic Reconciliation’ signal set, you must repeat the instructions above by first selecting the relevant year and then selecting the [Allow Inhibit Automatic Reconciliation] button. This will unset the Inhibit automatic reconciliation signal and the value in the Reconciliation Summary screen Inhibit column will be set to ‘N’.

For cases where you have set the Inhibit Automatic Reconciliation indicator and, the indicator remains set, the year will not automatically reconcile or, produce a work item to allow the year to be manually reconciled and you must proceed as follows

Where the indicator is set in respect

  • Of CY-1 or earlier

    • Make the enquiries necessary to settle the issue(s) as to why you did not want automatic reconciliation to take place
    • Update the customer’s record (for example IABD) as required to correct / update the issue(s)
    • Manually reconcile the year(s) concerned
  • CY and / or later

    • Manually BF the case until after the tax year end for which the indicator has been set
    • When the case comes out on BF, follow the ‘CY-1 or earlier’ process to reconcile the yea(s) concerned

If you believe that the case is SA, you can choose to reconcile the year ‘Reconciled - SA’. The status of ‘Reconciled - SA’ will be shown in the Reconciliation Summary screen.

To do this you must

  • Select the relevant tax year from the drop down menu
    And
  • Select the Set Reconcile SA action link

This will set the record to ‘Reconciled - SA’. You will be able to see which years have been reconciled SA because the status of the year will be set to ‘Reconciled - SA’ on the Reconciliation Summary screen.

By selecting the View Financial Events Screen action link you will be taken to the Financial Events Summary screen for the year concerned. The Financial Events Summary screen will allow you to view how any under / overpayment arising in the year has been collected / repaid.

The Reconcile action link allows you to trigger an online reconciliation. To do this you must

  • Select the tax year by using the tax year drop down menu
    And
  • Select the Reconcile action link

This will trigger validation checks that will determine whether or not the record holds all the information required to allow reconciliation to take place. Where the year concerned

  • Cannot be reconciled, an online message will be displayed showing the reason as to why reconciliation cannot continue
  • Can be reconciled and the year is CY-1, the system will undertake a single year reconciliation and you will be taken to the appropriate Tax Calculation screen
  • Can be reconciled and the year is CY-2 or earlier, the system will undertake further checks to determine whether or not a multiple year reconciliation (PAYE96210) can be performed. Where it

    • Can, you will be taken to the Multiple Years Reconciliation Summary screen (PAYE93016)
    • Cannot, a single year only reconciliation will be undertaken and you will be taken to the appropriate Tax Calculation screen

If you believe a year can be balanced, for example where a tax calculation (that is not issued) balances within tolerances, and the year cannot be reconciled, you can reconcile the year ‘Reconciled - Balanced’.

You should only do this as a last resort if this year is stopping later years from being reconciled. This is because there is no monetary value attached to the year and, from 2016-17, incorrect amounts of money could be passed over to the Scottish Government for Scottish taxpayers.

To do this you must

  • Select the tax year by using the tax year drop down menu
    And
  • Select the Reconciled - Balanced action link

This will set the record to ‘Reconciled - Balanced’. You will be able to see which years have been reconciled as balanced because the status of the year will be set to ‘Reconciled - Balanced’ on the Reconciliation Summary screen.

Cases where outstanding debt is coded within the year to be reconciled must not be ‘Reconciled - Balanced’ manually. Reconciliation must be triggered for these cases.

If you believe a year can be cleared as the individual had no employments, you can reconcile the year ‘Reconciled - No Employments’. To do this you must

  • Select the tax year by using the tax year drop down menu
    And
  • Select the Reconciled - No Employments action link

This will set the record to ‘Reconciled - No Employments’. You will be able to see which years have been reconciled as having no employments because the status of the year will be set to ‘Reconciled - No Employments’ on the Reconciliation Summary screen.

By selecting the appropriate year in the tax year drop-down menu followed by the SA Start Year action link, you will be taken to the SA Start Year screen (PAYE93033). The screen allows you to set, update and / or view the SA start year (that is the first SA year) to be applied to a given period in which SA applies.