Reconcile individual: end of year reconciliation: concessional relief
You will need to manually review any relief given within IABD for
- Community Investment Tax Credit, for further details see CITM6005 onwards and PAYE10030
- Gift of Shares to Charity, for further details see the guidance in the Relief Instructions (RE) Manual at RE1850 - RE1859 and PAYE10050
- Venture Capital Trust, for further information see Venture Capital Schemes Manual (VCM) at VCM64030 and PAYE10075
The actual amount invested or gifted should be recorded on IABD under the relevant allowance with Contact History note see PAYE130025 and will be taken into consideration in the end of year reconciliation.
Note: Particular care will be needed where Concessional Relief has been given for items not listed above and where no other coding descriptor exists as this will not be included within the tax calculation resulting in an underpayment.
There should always be
- A Contact History note detailing the source amount
- An Inhibit Automatic Reconciliation indicator (PAYE93015) set for the year
- A BF set (PAYE105520) to review the concessional relief given within IABD
Example - Relief due on gross Superannuation payments
For CY-1 customer has made a £1,000 gross lump sum payment to a Superannuation scheme and relief has not been given through the net pay arrangement and tax relief is due using the Pensions Tax Manual (PTM) see PTM044240. Generally in these cases tax relief is given through the Self Assessment system.
The customer will have been given tax relief in their tax code by
- Entering the gross amount paid £1,000 as Concessional relief in IABD
- Making a Contact History note of the lump sum payment
- Setting the Inhibit Automatic reconciliation indicator
- Creating a BF
When reviewing the BF you will need to
- Confirm the amount of the lump sum payment from Contact History
- Amend the Concessional relief to nil
- Enter the gross payment as RAR for the year of reconciliation only
- Enter an explanation on Tax calculation ‘Other’ Reasons Screen if the Account is not Reconciled - Balanced
This will ensure the correct amount of tax relief is given in the reconciliation.