Chapter PAYE77295
| Published date | 13 April 2016 |
| Record Number | PAYE77295 |
| Court | HM Revenue & Customs |
Important points to note about Employment and Support Allowance are listed below by functional area.
Annual CodingYou should refer to the annual coding Business Guidance Note (BGN) and / or Newsboard messages for the dates when the uprating takes place. See PAYE77251.
Coding- Where ESA is the ‘live’ primary source no ESA deduction should be included in the primary source tax code
- ESA can only be coded out in the primary source tax code when the primary source is an occupational pension / retirement annuity and the OCPN indicator is set on the employment record. ESA cannot be coded out where the primary source is an employment, in these cases you should follow the guidance at PAYE77260
- When a new occupational pension is notified, the occupational pension source should be set up as primary and the Employment and Support Allowance as secondary
Note: You must ensure the OCPN indicator is set against the new occupational pension.
- When Employment and Support Allowance ceases in CY remember to check that Employment and Support Allowance has been removed from CY+1
Note: Where Employment and Support Allowance has finished in CY the PAYE Service will automatically amend CY+1 to zero.
- A customer cannot receive both taxable Employment and Support Allowance and State Retirement Pension (NIB) at the same. The only time when both Employment and Support Allowance and State Retirement Pension should be coded in the same tax year is in first year State Pension cases. Employment and Support Allowance will finish the week before the State Retirement Pension begins, this would normally by CY. IABD for CY+1 must be updated to remove the Employment and Support Allowance deduction
Note: NPS ‘Tax Code Details’ screen will show the total of all state pension/state benefits received but the P2 output will use the individual amounts from the IABD summary screen and include a relevant explanatory note for each type.
- A customer can receive both taxable Employment and Support Allowance and Widowed Parent’s Allowance (WPA) or Bereavement Allowance (B Allce) at the same time. IABD must be updated with the WPA or B Allce amounts
- Employment and Support Allowance and Incapacity Benefit cannot be coded together in CY+1. Employment and Support Allowance and Incapacity Benefit can only be coded in the same tax year when Incapacity Benefit finishes and the new claim is Employment and Support Allowance, this would normally be in CY
- If Employment and Support Allowance is the...
To continue reading
Request your trial