SolvedPAYE28014 | Employer records: modified PAYE schemes: employees seconded abroad - EP Appendix 7B arrangements: NICs Settlement Return (Action Guide)
From HM Revenue & Customs · PAYE Manual
To deal with the receipt of a NICs Settlement Return (NSR) follow steps 1 - 16 below. The Guide is presented as follows
Steps 1 - 5
Steps 6 - 8
Steps 9 - 15
Step 16
Initial action
On receipt of an NSR
1. Ensure a P35 has been received under the employer’s main PAYE reference
2. Process any payment in accordance with PAYE50015
3. Use the e-Filestore to check that the figures in columns D to F on the NSR agree with the P14 NIC figures (Excel 77KB) submitted with the P35 under the employer’s main PAYE reference
4. Is there a discrepancy at step 3?
If yes, go to step 5
If no
Go to step 6 if the NSR shows an additional amount of NIC due
Go to step 9 if the NSR shows a refund of NICs
Go to step 16 if the NSR balances or is a nil return
5. Return the NSR to the employer asking to explain the discrepancy
The NSR shows an additional amount of NIC due
6. Is the amount entered in Column E of the NSR greater than zero?
If yes, go to step 7
If no, go to step 8
7. Process the ‘Total NIC settlement amount’ shown on the NSR under the EP Appendix 7B employer reference
8. Take the following action
Process the ‘Total NIC settlement amount’ shown on the NSR under the EP Appendix 7B employer reference
Send a copy of the NSR to NICO (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Issue letter 1 (Word 28KB) to the employer or employer’s representative
The NSR shows a refund of NICs
9. Is the refund of Class 1 secondary and / or primary NICs on earnings above the UEL?
If yes, go to step 10
If no, go to step 13
10. Is the refund due to the employer because
The NICs was paid by the employer under social security equalisation and without recovery from the employee, or
They are supported by mandates authorising refunds to be made to the employer?
If yes, go to step 11
If no, go to step 12
11. Take the following action
Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE employer reference
Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
12. Take the following action
Send a copy of the NSR to NICO to make the refund(s) to the employee(s) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE reference to refund to the employer the secondary NICs shown on column M
Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
Issue letter 2 (Word 23KB) to the employer or employer’s representative
13. Is the refund of primary NICs between the LEL and UEL and above the UEL due to the employer because
The NICs was paid by the employer under social security equalisation and without recovery from the employee, or
They are supported by mandates authorising s to be made to the employer?
If yes, go to step 14
If no, go to step 15
14. Take the following action
Process the NIC refund shown on the NSR under the employer’s main PAYE reference
Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
Pass a copy of the NSR to NICO to update the employees NIC record (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Issue letter 1 (Word 28KB) to the employer or employer’s representative
15. Take the following action
Pass a copy of the NSR to NICO to make the refunds to the employees (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Process the NSR as an additional complete P35 at Return Status Indicator (RSI) 2 with 0 (zero) forms P14 under the employer’s main PAYE reference to refund to the employer the secondary NICs shown on column M
Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
Issue letter 3 (Word 24KB) to the employer or employer’s representative
The NSR balances or is a nil return
16. Take the following action
Use either EBS function Cancel One Year Only (COYO) or Amend Employer Indicators to set COYO indicator on the EP Appendix 7B employer reference
If the NSR shows the primary NICs between the LEL and UEL has altered for any of the employees send a copy of it to NICO to update the employees NIC record (This content has been withheld because of exemptions in the Freedom of Information Act 2000)