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PAYE21022 | Employer records: maintain employer record: cancelled one year only (COYO) - 2008 onwards (Action Guide)

From HM Revenue & Customs · PAYE Manual

To clear a year on an employer record cancelled one year only, follow steps 1 - 32 below. The Guide is presented as follows

Steps 1 - 7

Step 8

Step 9

Step 10

Steps 11 - 13

Steps 14 - 16

Step 17

Step 18

Steps 19 - 21

Step 22

Steps 23 - 31

Step 32

For details of how to access any of the Employer Business Service functions, use PAYE057.

Initial action

1. Ensure that no return is appropriate

  • If you do not hold a return

    • Review the papers held

    • Consider whether a determination under Regulation 80 is appropriate

A check must be made to establish whether any payments have been allocated against the employer record for the year

2. Use Function VIEW BROCS Format 3 (Postings Summary) to identify any payments made by the employer / contractor in the tax year relating to the return

  • If payments are shown on BROCS - make a note of the amounts and the dates of payment, - go to step 3

  • If there are no payments shown on BROCS - go to step 7

Where you find that payments have been allocated to the year

3. Use Function VIEW BROCS Format 9 to check whether the Class 1A NIC signal is set

  • If the signal is set - go to step 7

  • If the signal is not set, telephone the employer / contractor immediately - go to step 4

Note: Where you are dealing with COYO between 6 and 30 April you must check BROCS for both CY-1 and CY-2. This is because CLIA signals are not updated on BROCS for CY-1 until mid to late April.

Nil Return

4. If you have received a nil return

  • Ask the employer to explain why the amount was paid and not entered on the return, or

  • Ask the employer to explain why the amount was paid and they have told you that a return is not due

Note: For a PSC scheme, ask the employer to confirm that the money paid relates to subcontractor payments. Where this is the case, go to step 8.

5. Use the information supplied by the employer to decide whether the payment has been allocated correctly or not

If the payment has been allocated incorrectly

  • Arrange for BROCS to remove the payment from that year and to reallocate this correctly. For more information see ‘Overpayments and reallocations’ at PAYE47075 - go to step 7

If the payment has been allocated correctly

  • Advise the employer that they must submit a complete return

  • If you hold a return go to step 6, otherwise

  • Use Employer Notes to confirm that a return is due for the year and take no further action

Incomplete return

6. Send the return back to the employer / contractor requesting a complete return. For more information see ‘Checks prior to recording receipt of a return (Action Guide menu)’ at PAYE40016

7. Use Function VIEW BROCS to check whether the CLASS 1A NIC EMP signal is held on the employer record

  • If this signal is held you must follow the instructions in ‘Nil returns - 2005 onwards (Action Guide)’ at PAYE43031 to process a nil return

  • Otherwise go to step 9

PSC schemes

8. Where the employer has confirmed that a P35 is not required

  • Use Function AMEND EMPLOYER TRADE AND SCHEME to update the scheme type to XP as in emp80088

  • Review and update the scheme type for subsequent years

P Scheme Type

9. Where the employer has confirmed that a P35 is not required go to step 10

Updating the employer record

10. If there is a cessation date already recorded on EBS for that tax year you should not try and clear the year using cancelled one year only (COYO). You should record a nil P35

In other cases use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS to clear the year cancelled one year only (COYO)

  • If there are no exceptions you will have successfully cleared the year ‘cancelled one year only’

  • If the year is not live go to step 11

  • If the employer record has moved go to step 14

  • If the year has already been cleared go to step 17

  • If the employer record relates to a large employer go to step 18

  • If an error message relating to incentive appeals is displayed go to step 19

EBS shows year not live

If any of the following apply you will be unable to clear a year cancelled one year only

  • The employer record is cancelled

  • The start date is later than the year on the return

  • The employer record is dormant

  • The employer record is ceased

11. Review the papers and check that the correct year was entered

12. If the correct year was not entered

  • Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to update the employer record as cancelled one year only (COYO) against the correct year

13. If the correct year was entered

  • No further action is required as the year is already cleared

Employer record has moved

This action must be taken when you have been unable to clear a year cancelled one year only because the employer record has moved. This could be where the employer record has been

  • Transferred

  • Merged, or

  • Succeeded

14. Use Function AMEND or VIEW EMPLOYER SCHEME HISTORY to view the new employer reference

15. If the new employer reference remains in your responsible Organisation Unit

  • Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to record the year on the employer record as cancelled one year only (COYO), otherwise

16. Send the correspondence to the new office immediately

Year already cleared

This action must be taken when you have attempted to clear a year cancelled one year only where

  • The cancelled one year only (COYO) indicator is already set

  • A return has already been received and a charge has been processed

17. Review the papers and check that the correct year was entered

  • Use Function CANCEL SCHEMES ONE YEAR ONLY or Function AMEND EMPLOYER INDICATORS again to update the employer record as cancelled one year only (COYO) against the correct year

    • If the correct year was entered no further action is required as the year is already cleared

Large employer

This action must be taken if you have attempted to clear a year cancelled one year only and the employer record has more than 1000 employments attached to it

18. Review the papers held to establish if it was appropriate to attempt to cancel the year one year only

  • If this was not the correct action you must take alternative action to clear the year, for example obtaining a completed return or ceasing the employer record, otherwise

  • Select the [Confirm] button to initiate the computer check

Incentive appeals

19. Take the following action if you are presented with the following error message

  • ‘There is an Open Incentive Appeal for the year’ go to step 20, or

  • ‘There is an Upheld Incentive Appeal for the year’ go to step 21

20. B/F the papers for 14 days until the outcome of the incentive appeal is known

  • If the appeal is either withdrawn or denied use either of the following functions to record that the employer record for that year is cancelled one year only (COYO)

    • Function CANCEL SCHEME ONE YEAR ONLY, or

    • Function AMEND EMPLOYER INDICATORS

  • If the appeal is upheld go to step 21

21. The record cannot be cancelled one year only

Filed online indicator set

22. If you are presented with the following error message the record cannot be cancelled one year only

  • ‘A return has been Filed Online for the year’

  • No further action is required as the year has already been cleared

Final review

23. Use Function VIEW EMPLOYEES

  • Select 'Linked Employees'

  • Where there are more than 10 employees - go to step 24

24. For each employer record that has live employee records attached send an email to the relevant PAYE section's eForm to advise them of the year for which you are setting the COYO indicator

When a year has been cleared by setting ‘cancelled one year only’ or processing a nil return, it is essential that you ascertain the situation for the current year

25. Use Function View EMPLOYER SCHEME HISTORY to check whether a Cessation Date is held

  • Where a Cessation Date is recorded, no further action required - Go to Step 32, or

  • Check if any of the following are held on the employer record

    • Use Function VIEW BROCS, format 3 to check if any payments have been received for the current year

    • Use Function VIEW BROCS, format 9 to check whether the CLASS 1A NIC indicator is held, or

    • Use Function VIEW EMPLOYEES co check whether any of the live employees displayed have a Commencement Date later than 06/04/CY

  • If any of the above are held on the employer record, no further action is required - Go to Step 32, otherwise

  • Go to Step 26

26. Contact the employer

  • If you contact the employer by telephone - go to step 27, or

  • If you unable contact the employer by telephone - go to step 28

27. Where you contact the employer by telephone

  • If, for the current year, the employer makes any of the following - go to step 32

    • Making payments to directors / employees that are at or above the lower earnings limit

    • Making payments to any directors / employees who have another job / income

    • Providing expenses and / or benefits to directors / employees, or

    • Making payments to subcontractors

  • If the employer is not making any of the above - go to step 31

28. Where you are unable contact the employer by telephone

29. When the employer returns the stencil your next action will depend on the answers provided

  • Where the employer confirms that the business has ceased

    • Use Function AMEND EMPLOYER SCHEME HISTORY to enter the actual cessation date if this falls within CY, or

    • 31 March CY-1 if the actual cessation date is prior to 31/03/CY-1

Note: Where the scheme type is PSC or XP you must enter a ‘Date Notified’, which is the date you received the information or select one of the following check boxes

  • ‘Date Not Known’ - where you do not know the date you received the information, or

  • ‘Date Not Applicable’ - where the update is being made from information not received from the employer

  • Where the employer confirms that no payments are being made or benefits / expenses provided

  • Where the employer confirms that payments are being made or benefits / expenses provided

    • Use Function AMEND EMPLOYER TRADE & SCHEME DETAILS to check that the scheme type held for CY is correct and update if necessary

30. At BF date

  • If the employer has returned the stencil no further action is required, or

  • If the employer has not returned the stencil - go to step 31

31. Use Function VIEW EMPLOYEES, - LIVE EMPLOYEES

  • Where there are live employees

    • Forward a request to the PAYE section to enter a cessation date of 31/03/CY-1

    • BF papers for 30 days to check that there are now no live employees

  • Where there are no live employees

    • Use Function AMEND EMPLOYER SCHEME HISTORY to enter 31/03/CY-1 as the cessation date

Note: Where the scheme type is PSC or XP you must enter a ‘Date Notified’, which is the date you received the information or select one of the following check boxes

  • ‘Date Not Known’ - where you do not know the date you received the information, or

  • ‘Date Not Applicable’ - where the update is being made from information not received from the employer

Final action

32. If the employer record has been cancelled one year only following receipt of a complete nil annual return, file away the return