DMBM521250 - PAYE: E-payment non composite defaults: Non-composite surcharge calculation

The majority of this manual will be archived on 1 July 2024. If there is content within this manual you use regularly, email hmrcmanualsteam@hmrc.gov.uk to let us know.

The following guidance details how to calculate the surcharge for an employer where you have been clerically maintaining the default count.

It applies because the employer has at some point defaulted on some but not all of its duty types.

After the end of April when the default situation for the full year is known

  • total the defaults for each duty type shown on the clerical default count and surcharge stencil in the relevant ‘Defaults this year’ row box and
  • use this to determine and complete the ‘% applied’ columns for each duty type.

The fact that the ‘clerical surcharge’ signal is set will mean that BROCS will not automatically raise the surcharge.

Instead it will enter the case on the ‘Inappropriate for surcharge calculation Receivables’ list produced when the employer’s annual return is processes on BROCS. The reason shown for entry will be ‘Clerical Surcharge Signal’.

Where an entry appears on this list with this reason

In addition

  • refer to the appropriate ‘clerical default and clerical surcharge’ stencil
  • complete the charge figures for each duty on the stencil. For guidance on this refer to DMBM521220
  • use these to clerically calculate the surcharge due for each duty type
  • add these individual duty surcharge figures to provide the total surcharge for the year and record this total surcharge figure on BROCS using AMEND SURCHARGE AND SET SIGNALS Format 2 [ASA, AS, ASN (=Deduction Year)]
  • enclose a full surcharge computation in with the surcharge notice The following link shows you an example of a non-composite surcharge computation
  • ensure that IDMS Notes & Assets shows the full calculation details for each duty type from the clerical stencil i.e. the date the surcharge notice was issued (only if this date is not today’s date)
  • the total surcharge amount
  • the surcharge figure for each duty
  • the default count at the end of the previous year (‘Previous defaults’) for each duty
  • the CY default count for each duty
  • specify the percentages used and the total percentage used in calculating the surcharge for each duty and
  • detail each duty charge from the P35 used in the surcharge calculation.