PAYE93020 - Reconcile individual: end of year reconciliation: validation
There are a number of conditions that need to be met in order for reconciliation to take place. If any of the conditions are not met then you will receive an online message.
The rest of this subject is presented as follows
Validation check end of year reconciliation
Further system checks
Validation check end of year reconciliation
Where the reconciliation is a result of an online trigger, for example by the inputting of any target review form and or P60 details onto the IABD screen (action guide tax80002), the following validation checks will take place:
- Is the individual in SA?
- Is the individual CPR or EXPAT and not in SA?
- Is an SA return expected for this tax year?
If one of the above applies you will receive an online message advising that the case cannot be reconciled and the reason why.
Where the reconciliation is a result of an automatic action, for example the receipt of a form P14 or EOY Record, reconciliation will not take place if any of the following apply
The case is SA:
- The system will mark the case as ‘Reconciled SA’ and no further action will be taken
The case is marked as CPR or EXPAT and not SA
- Work item 123 ‘SBA indicator held - No SA indicator set’ (PAYE93026) will be created
The individual record either has a date of death or is marked as ‘Deceased’, details of a Capacitor, Administrator or Personal Representative are not held and the account has a TRN or is an SA case
- Work item 98 - ‘Deceased- Unable to clear records’ will be created and the process will be ended.
Further system checks
If a re-reconciliation is needed on a case that has had a previous reconciliation with a reconciliation status of ‘underpaid’, the system will check to see what the current status of the underpayment is.
If the underpayment or part of it has since been remitted, a work item 224 ‘EOYR review re-reconciliation’ (action guide tax40203 WI224) will be created. If there has been no remission (in full or part) then the re-reconciliation can take place.
If a previous reconciliation has taken place and a voluntary payment is held in respect of the reconciliation, where the system re-reconciles the year, the tax calculation concerned will be issued to the customer and work item 307 ‘Voluntary payment held in year’ (action guide tax40137 WI307) will be created.
Voluntary Payments WI307 Guide
Currently where a Voluntary Payment has been received for a year and that year is re-reconciled, the Voluntary Payment is automatically unallocated and WMI307 is created for a user to reallocate it to a new underpayment, or to repay all or part of it. WMI307 will now be automated so that Voluntary Payments can be automatically re-allocated according to the final position after the re-reconciliation has taken place.
The new processes are in bold.
Where a Voluntary Payment has been allocated against an underpayment and then that year is re-reconciled, any Voluntary Payment will become unallocated.
After re-reconciliation if the underpayment is greater than the amount of unallocated Voluntary Payment, allocate the Voluntary Payment to the outstanding amount, then attempt to code the rest.
If the underpayment is the same amount of the Voluntary Payment, allocate the Voluntary Payment to it, then follow business as usual.
If the underpayment is less than the Voluntary Payment, allocate the Voluntary Payment to it then repay the remaining amount.
If the customer is overpaid, repay the whole amount of the Voluntary Payment.
If a previous reconciliation has taken place and you or the system try to re-reconcile the account then the system will check to see if the SA signal is set. If the SA signal is set the system will review the accounting events for the SA year. If there are any substantive accounting events then the re-reconciliation will be stopped by the system. For automatic re-reconciliations work item 225 ‘EOYR - amendment to tax calc required’ (action guide tax40187 WI225) will be created. For on-line re-reconciliations an error message will be produced.
If the case has already been reconciled because a form P60 had been received and a subsequent form P14 is received, the system will perform a check to see if the details for the pay and tax are still the same. If they are the same then no further action will be taken. If the details are different then work item W116 ‘P60 - P14 discrepancy’ (PAYE93030) is created.
At the point at which the system uses P14 details to reconcile a customer’s record for CY-1, it will undertake a check to ensure that code on the P14 (within certain parameters) matches with that issued to them to use. Where the code:
- Matches, the customer's record will be reconciled as appropriate and any tax calculation (P800) required as part of the reconciliation process will be issued to them
Does not match the case will be directed to Compliance to allow to allow them to consider whether or not a direction under Regulation 72(5) or Regulation 81(4) () is required. At the point at which this is done a tax calculation (P800) will not be issued and an automated Contact History note of either ‘Multiple year reconciliation, tax code discrepancy’ or ‘Single year reconciliation, tax code discrepancy’ will be entered onto the customer's account. In the case of a multiple year reconciliation, all years up to and including CY-2 will have been reconciled, the result will have been acted upon and no tax calculation for CY-1 will be retained on the customer's account and in the case of a single year reconciliation a copy of a CY-1 tax calculation will be retained on the customer's account. Where either Contact History note is on the account, unless there is a later note on it to show that Compliance have not taken the case forward or that they have concluded their enquiries, (details of the notes concerned are below) you should not manually trigger reconciliation for CY-1 unless specific guidance directs you to do so.
When a case has been directed to Compliance for review and they have either not taken it up or, they have taken it up and have concluded their enquiries, reconciliation for the year concerned will be triggered and they will put a manual Contact History note on the customer’s record to show any Compliance actions taken. The table below contains details of the notes concerned and shows the actions they have taken, if any, in the case-
| Contact History Note | Details |
|---|---|
Tax Code discrepancy YY-YY. No compliance review. Reconciliation triggered |
Possible Employer error not taken up by compliance for review |
Tax Code discrepancy YY-YY. Case deselected and not taken up with Employer |
Possible Employer error not taken up by compliance for review |
Tax Code discrepancy YY-YY. Employee to pay. Letter/direction notice issued DD/MM/YYYY |
Employer error taken up by compliance. Review concluded and the Employee has received a letter/ direction to inform them that the underpayment will be collected from them |
Tax Code discrepancy YY-YY. Employee to pay. |
Employer error taken up by compliance. Review concluded and it has been determined that the Employee is to pay. The Employee has not received a letter/ direction to informing them of this |
Tax Code discrepancy YY-YY. Employer to pay. EYU received DD/MM/YYYY |
Employer error taken up by compliance. Review concluded and it has been determined that the Employer is to pay. The Employer has paid and an EYU/further year to date FPS to cover the tax due has been received. |
Tax Code discrepancy YY-YY. Employer to pay. £xxx.xx credit given to Employee. |
Employer error taken up by compliance. Review concluded and it has been determined that the Employer is to pay. The Employer has not sent in an EYU/further year to date FPS to cover the tax due so an informal credit to cover it has been given to the employee |
For cases where the employer error has not been taken up by compliance and for cases where it has been determined that the employee should pay the amount owing, if you are contacted by the customer about the error you should follow the appropriate guidance to resolve matters.
In the case of a multiple year reconciliation (PAYE96201), where the system attempts to re-reconcile a year that was previously part of a multiple year reconciliation but it cannot do so as something has changed on the customer’s record, work item 315 ‘Unable to complete multiple years reconciliation’ (action guide tax36134 WI315) will be created.