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HMRC internal manual

PAYE Manual

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HM Revenue & Customs
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PAYE Manual: recent changes

Below are details of the amendments that were published on 10 October 2011 (see the update index for all updates).

Only important changes for dissemination to staff are listed in the table below. The content of other pages within this Manual may have required a minor change because of an update to the originating subject(s) listed or to correct spelling mistakes or links, or to change page presentation. You are reminded that any page printed from this Manual is uncontrolled and may not be the latest version. It is recommended you always refer to guidance online.

Page Details of update
   

Left bar content

PAYE001 (HMRC Intranet only) ‘Business Calendar’ - Updated. Entries for September 2011 removed and entries for September 2012 added.
   
PAYE056 (HMRC Intranet only) ‘Index of Forms’ - ‘P75RL’ entry noted that this form is now obsolete.
PAYE058 (HMRC Intranet only) ‘Index of Work Items’ - Links added to SPDs for work items 104, 116 and 136.
PAYE280 (HMRC Intranet only) ‘Contacts’ - Updated to reflect PAYE, SA and NICs (PSN) change of name to ‘Personal Tax Product & Process’ and contact point for queries if you work outside Customer Operations PSA.

Coding

PAYE11040 ‘Codes: how they are used and calculated: P2 standard notes’ - Under table for ‘Deductions’ three new entries added for ‘Outstanding Debt amount’ - ‘Reduction to collect unpaid SA Self Assessment Outstanding Debt’, ‘Reduction to collect overpaid TC Tax Credit Outstanding Debt’ and ‘Reduction to collect unpaid SA Self Assessment Tax and overpaid TC Tax Credit’.
   
PAYE11110 ‘Codes: how they are used and calculated: allowances and reliefs - how to calculate’ - In the table text added to ‘Note’ for entry ‘Your personal allowance’ and ‘Note’ added to entry for ‘Income reduction of age-related allowances’.
PAYE12045 ‘Coding deductions and expenses: expenses’ - Under sub heading ‘Locally agreed expenses (FRE)’ and heading ‘FRE for police officers’, reference to PAYE12050 removed as this has been replaced by SPD 6a.12. Text added and updated under sub heading ‘Flat rate expenses (FRE)’ and link added to the new SPD.
PAYE12050 ‘Coding deductions and expenses: expenses: flat rate expenses (Action Guide)’ - Action Guide removed as replaced by SPD 6a.12.
PAYE12060 ‘Coding deductions and expenses: non-PAYE income’ - Text added under sub heading ‘New sources of non-PAYE income advised in writing’ and heading ‘Individual outside of SA at the time of notification’ about where the amount notified is £2500 or more and there is no liability to tax.
PAYE12070 ‘Coding deductions and expenses: underpayments’ - Amount at which the underpayment cannot be coded increased.
PAYE12071 ‘Coding deductions and expenses: work item 93 - unable to code u/p - insufficient income live SA (Action Guide)’ - Under sub heading ‘Initial action in all cases’, at step 6, text added to second bullet and ‘Note a’ updated.
PAYE12080 ‘Coding deductions and expenses: underpayment restriction’ - Amount at which the underpayment cannot be coded increased.
PAYE13075 ‘Coding: general principles: coding objections’ - Under sub heading ‘Flat rate expenses (FRE)’ the reference to the ‘FRE guidance at PAYE12050’ removed.
PAYE13080 ‘Coding: general principles: coding rules’ - Under sub heading ‘Updating the PAYE code for a leaver’, link added to PAYE13091.
PAYE13140 ‘Coding: general principles: potential cases for SA’ - Bullets relating to ‘rules’ updated.
PAYE13141 ‘Coding: general principles: work item 217 - potential SA case (Action Guide)’ - Text added to ‘Note’ at step 1.
PAYE14000 to PAYE14010 ‘Coding: adjustments to collect tax: contents’ - New section.

Employer records

PAYE20040 ‘Set up employer record: information to set up an employer record’ - New bullets added for ‘Sole Trader details’ and ‘Charities and Committee-run organisations’.
   
PAYE20045 ‘Set up employer record: limited company and director details’ - ‘Note’ added under sub heading ‘Company Details’ and heading ‘Director Details’.
PAYE20136 ‘Set up employer record: P scheme - PAYE employees only (Action Guide)’ - Under sub heading ‘Set up employer record’, at step 3, further bullet added for ‘National Insurance Number’.
PAYE21090 ‘Maintain employer record: employer segmentation’ - Subject updated.
PAYE21091 ‘Maintain employer record: employer segmentation (Action Guide)’ - Action Guide removed as obsolete.

Employer returns

PAYE41036 ‘Record receipt of employer return: insolvency cases (Action Guide)’ - Text added to bullet at steps 2 and 6 about the receipt date for dissolved companies.
   
PAYE41040 ‘Recording receipt of employer return’ - Subject updated.
PAYE41041 ‘Recording receipt of employer return (Action Guide)’ - New sub heading and corresponding steps added for ‘Returns received for years CY-7 (2004-05 onwards)’ and remaining steps re-numbered. Further bullet added at step 3 for when you receive a return for years 2004-05 onwards. Text added to bullet at steps 7, 12, 16, 18 and 20 about the receipt date for dissolved companies.
PAYE47020 ‘Employer return - overpayments: completion of form P565 request stencil’ - ‘Note’ under sub heading ‘When to use a form P565 Request Stencil’ updated.
PAYE50901 ‘Employer starter and leaver forms: employer e-file in-year penalties: introduction’ - Text added under sub heading ‘Background’.
PAYE50910 ‘Employer starter and leaver forms: employer e-file in-year penalties: calculation of a fixed penalty’ - Subject updated.
PAYE50930 ‘Employer starter and leaver forms: employer e-file in-year penalties: ECS penalty reference numbers’ - ‘EFI’ updated to read ‘EYI’.
PAYE51015 ‘Employer EOY penalties: ECS penalty reference numbers’ - Further bullets added about how the reference numbers are made up.

P11D processing

PAYE57000 to PAYE57050 ‘P11D processing: logging forms P11D: contents’ - New section.
   
PAYE57200 to PAYE57350 ‘P11D processing: processing forms P11D: contents’ - New section.
PAYE57500 to PAYE57650 ‘P11D processing: management of workflow management tool: contents’ - New section.
PAYE57800 to PAYE57840 ‘P11D processing: QA/QC for captured forms P11D: contents’ - New section.
PAYE57900 to PAYE57910 ‘P11D processing: reminders for outstanding forms P11D: contents’ - New section.
PAYE58000 to PAYE58020 ‘P11D processing: ECS / NPS inhibition signal: contents’ - New section.
PAYE58400 to PAYE58401 ‘P11D processing: P11D(b) penalty appeals: contents’ - New section.

Employment maintenance

PAYE60036 ‘In-year forms and data capture: work item 49 - temporary record created - trace / maintain / merge (Action Guide)’ - Step 7 updated.
   

PAYE operation

PAYE74025 ‘Lump sum termination payments: repayment claim following termination payment’ - Subject updated.
   
PAYE74026 ‘Lump sum termination payments: repayment claim following termination payment (Action Guide)’ - Text added above the table. Action Guide updated.
PAYE74030 ‘Lump sum termination payments: termination payment notification received’ - Text added to final paragraph.
PAYE76030 ‘Pensioners: DWP uprating service of state pensions’ - Final ‘Note’ updated to include reference to ‘State Pension Age’ automated scan.
PAYE76071 ‘Pensioners: P46(DWP) (Action Guide)’ - Note added at step 1. At steps 11, 13, 14 and 15 where instructed to close the work item, guidance added to include an accurate reason for closure. At steps 15 and 20 ‘SAM100021’ changed to read ‘SAM100221’.
PAYE76086 ‘Pensioners: coding of state pension / benefits in the first year’ - New sub-heading ‘Automatic coding of state pension’.
PAYE76087 ‘Pensioners: work item 136 - First year NIB (Action Guide) - Deleted as replaced by SPD WI 136.
PAYE76088 ‘Pensioners: P161 not completed (Action Guide)’ - Action Guide rewritten.
PAYE76089 ‘Pensioners: P161 (Action Guide)’ - ‘Note b’ added at step 1 and step 6 updated.
PAYE76090 ‘Pensioners: pensioners work item 136 deletion (Action Guide’ - Deleted as replaced by SPD WI 136.
PAYE79027 ‘Targeted review forms: general rules for examining forms (Action Guide)’ - New step 5 added.
PAYE79028 ‘Targeted review forms: examining form R40 (Action Guide)’ - Example added at step 4.
PAYE80032 ‘Review of claims and deductions: gift aid (Action Guide)’ - Action Guide updated under sub heading ‘Reply received’.
PAYE80035 ‘Review of claims and deductions: PPR (Action Guide)’ - Action Guide updated under sub heading ‘Reply received’.
PAYE81001 ‘Double taxation claims submitted by non resident individuals: introduction’ - Link inserted to SPD42.
PAYE81025 ‘Double taxation claims submitted by non resident individuals: government pensions’ - Cross reference inserted to SPD42.
PAYE81035 ‘Double taxation claims submitted by non resident individuals: information needed on a double taxation claim form’ - Deleted as replaced by SPD42.
PAYE81036 ‘Double taxation claims submitted by non resident individuals: visual check of a double taxation claim form (Action Guide)’ - Deleted as replaced by SPD42.
PAYE81037 ‘Double taxation claims submitted by non resident individuals: Deciding if double taxation relief is available (Action Guide)’ - Deleted as replaced by SPD42.
PAYE81038 ‘Double taxation claims submitted by non resident individuals: identifying the effective date from when double taxation relief is available (Action Guide)’ - Deleted as replaced by SPD42.
PAYE81039 ‘Double taxation claims submitted by non resident individuals: Repayment for pension income (Action Guide’ - Deleted as replaced by SPD42.
PAYE81040 ‘Double taxation claims submitted by non resident individuals: double taxation and underpayments (Action Guide)’ - Deleted as replaced by SPD42.
PAYE81041 ‘Double taxation claims submitted by non resident individuals: coding (Action Guide)’ - Deleted as replaced by SPD42.
PAYE81046 ‘Double taxation claims submitted by non resident individuals: double taxation relief and repayments for royalty income (Action Guide)’ - At step 4, cross reference inserted to SPD42.
PAYE81047 ‘Double taxation claims submitted by non resident individuals: claims and repayments for interest (Action Guide)’ - Cross reference inserted to SPD42.
PAYE81050 ‘Double taxation claims submitted by non resident individuals: repayments in self assessment (Action Guide)’ - At steps 1 and 22, cross reference inserted to SPD42.
PAYE81056 ‘Double taxation claims submitted by non resident individuals: income remitted to country of residence (Action Guide)’ - At steps 8 and 20, cross reference inserted to SPD42.
PAYE81065 ‘Double taxation claims submitted by non resident individuals: guidance on more complex or difficult cases’ - Cross reference inserted to SPD42.

Reconcile individual

PAYE90001 ‘Underpayments: introduction’ - Amount at which the underpayment cannot be coded increased.
   
PAYE90011 ‘Underpayments: work item 236 - issue request for voluntary payment’ - Amount at which the underpayment cannot be coded increased.
PAYE90012 ‘Underpayments: work item 236 - issue request for voluntary payment (Action Guide)’ - Amount at which the underpayment cannot be coded increased.
PAYE90025 ‘Underpayments: PAYE underpayments’ - Amount at which the underpayment cannot be coded increased.
PAYE90031 ‘Underpayments: revenue loss - remission of tax (Action Guide)’ - Action Guide updated. Sub heading and corresponding steps for ‘Form P75RL’ removed (as this form is now obsolete) and remaining steps re-numbered.
PAYE91062 ‘Overpayments: prepare and issue a manual repayment’ - Further bullet, about ‘in-year repayments made in respect of higher rate tax deducted from a payment after leaving’ added to the list of ‘the only repayments that should be made using the manual PO process’.
PAYE93001 ‘End of year reconciliation: introduction’ - Amount at which the underpayment cannot be coded increased.
PAYE93015 ‘End of year reconciliation: reconciliation summary screen’ - Amount at which the underpayment cannot be coded increased.
PAYE93030 ‘Work item 116 - P60 - P14 discrepancy’ - This was an Action Guide but the ‘Action Guide’ has been replaced by an SPD. Subject to remain for information.
PAYE93037 ‘End of year reconciliation: tax calculation screen’ - Under sub-heading ‘Issue Balanced Tax Calculation action link’ where unable to issue P800 in cases that balance exactly, guidance added that SEES letter OCA42 can be used.
PAYE93045 ‘End of year reconciliation: tax calculation - reasons for underpayment screen’ - Amount at which the underpayment cannot be coded increased.
PAYE93053 ‘Work item 102 - overpayment exceeds tolerance (Action Guide)’ - Text added above the table and step 5 updated.
PAYE93060 ‘Work item 104 - tax calculation - manual issue’ - This was an Action Guide but the ‘Action Guide’ has been replaced by an SPD. Subject to remain for information.
PAYE93063 ‘End of year reconciliation: work item 307 - voluntary payment held in year (Action Guide)’ - Amount at which the underpayment cannot be coded increased.
PAYE93083 ‘End of year reconciliation: redundancy repayment calculation (Action Guide)’ - ‘Note’ added at the beginning, above the table.
PAYE94045 ‘In-year reconciliation: trivial commutation payments’ - Text added above first sub heading about in-year repayment claims in respect of higher rate tax deducted from lump sum payments.
PAYE94055 ‘In-year reconciliation: redundancy repayment calculation (Action Guide)’ - ‘Note’ added at the beginning, above the table.
PAYE94070 ‘In-year reconciliation: unemployment repayments calculation: overpaid’ - Subject updated.
PAYE96275 ‘Reconciling CY-6 to CY-2: reconciling multiple years - final results’ - Amount at which the underpayment cannot be coded increased.

Accounting

PAYE98005 ‘End of year: SA underpayments’ - Text added to second bullet under sub heading ‘Checks made for coding’. Amount at which the underpayment cannot be coded increased
   
PAYE98021 ‘End of year: underpayment spreading (Action Guide)’ - Amount at which the underpayment cannot be coded increased.

Individual records

PAYE103011 ‘Maintain individual details: work item 22 - DOB amended - review coding (Action Guide)’ - Sub-headings updated to remove reference to age 65. ‘Note’ added at step 6.
   
PAYE103095 ‘Maintain individual details: work item 252 - PAYE Service/Frameworks - confidence check exception (Action Guide)’ - Step 23 updated. New referral template available.
PAYE104041 ‘Merge individual records: manual merge: post-merge accounting/reconciliation review (Action Guide)’ - At step 7 the amount at which the underpayment cannot be coded increased.

IABD

PAYE130050 ‘IABD: expenses’ - Under sub heading ‘Job Expenses’, ‘Note’ re-positioned.
   
PAYE130060 ‘IABD: investment income’ - Under sub heading ‘Untaxed Interest’, ‘Note’ added about if the individual has no net liability to tax and receives untaxed interest of over £2500.
PAYE130075 ‘IABD: taxable social security benefits’ - Cross reference corrected where IB ceases and State Pension commences.
PAYE130080 ‘IABD: trusts, settlements and estates’ - Text added under sub heading ‘Trusts, Settlements and Estates at Savings rate’.