PAYE47121 - Employer returns: employer return - overpayments: trade dispute: refund not made at due time (Action Guide)

To take the appropriate action when an employer has been unable to make a refund at the appropriate time due to a trade dispute, to an employee who has subsequently left their employment, follow steps 1 - 7 below. The Guide is presented as follows

Refund withheld is for the current year

Step 1

Refund withheld is for the previous year and return already sent

Steps 2 - 6

Refund withheld is for the previous year and return NOT sent

Step 7

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

Refund withheld is for the current year

1. If the employee has left and the refund has not been paid within 42 days of the due time to the employee you must advise the employer to:

  • Pay the sum to the Debt Management Office
  • Add the tax not refunded to the final figure of tax on form P14 at the end of the year
  • Show the tax due according to the Tax Tables where a form P45 is issued in the same tax year

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Refund withheld is for the previous year and return already sent

2. If the employee has left and the refund relates to a previous tax year and the employer has already sent in his annual return then you must

  • Check whether the return shows the amount after deducting the amount for refunds withheld
  • If it does go to step 3
    Otherwise
  • If the return shows the correct tax including tax that has been withheld any claim to repayment made by the taxpayer can be processed by the appropriate PAYE section in the normal way

3. If the return provided by the employer shows the amount after deducting the amount for refunds withheld then you must

  • Use form P400 to ask the Debt Management Office to obtain an additional P35 and P14 showing the amount of tax not refunded

4. On receipt of the additional return dispose of the P14 copy and P60 as confidential waste

5. Use Function RECORD RETURN RECEIPT to record the receipt of the additional return

6. Use Function CAPTURE EOY RETURN DETAILS to process the additional return

Note: The appropriate PAYE section can now deal with any claim for repayment of the extra tax made by the taxpayer.

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Refund withheld is for the previous year and return NOT sent

7. If the employee has left and the refund relates to a previous tax year and the employer has not sent in the return then you must advise the employer:

  • To show the correct tax (including the tax not refunded) on the deductions working sheet and reflect this on the forms P35 and P14
  • Not to issue forms P61 or P62 with form P60
  • Send in the return as soon as possible