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Inland Revenue

Our Inland Revenue solution, based on our ODEX product family, is already used by many companies to send files to and receive files from the IR.

As from tax year-end 2004/2005, companies of 250+ employees are required to send End-Of-Year tax documents electronically to the Inland Revenue. ODEX’s reliability and capacity for handling files over 1 Gb makes it an ideal choice for sending such time-critical financial files.

ODEX provides your electronic connection to the Inland Revenue and integration with your internal systems, picking up files created by your payroll package and sending them on to the IR. If the files produced by your payroll system are not in the required IR format, our IR accredited XLATE software can be used to translate files into the correct format before transmission.

ODEX can handle ISDN connections directly to the Inland Revenue, or TCp/Ip connections via a VAN. We recommend our DINET VAN for communications with the IR, since DINET, unlike some other VANs, can handle both EDI and GFF format files and does not require any extra addressing information.

Overview

Our Inland Revenue solution allows you to interface your payroll systems with the Inland Revenue (IR) using the electronic links provided by the Electronic Business Unit (EBU).

By providing an electronic alternative to the approach of paper based forms the Inland Revenue has provided employers with the opportunity to enjoy cost savings by streamlining the flow of information between the two parties.

Benefits

To take full advantage of the cost saving opportunities the employer should use the organisation's payroll system to process the information exchanged (both inbound and outbound) with the Inland Revenue, which have been shown to provide the following benefits:

• A paperless environment with fast (automated) and efficient application of data
• Reduced manual effort
• Accuracy of data reporting and error reduction
• Financial and operational integrity with data security
• Reduced paperwork, postage costs and stationery costs
• Implementation of tax code changes... first time... on time
• Improved audit trails

How ODEX Works

The software solutions provided by Data Interchange enable connectivity to the EBU using ODEX. This allows for the exchange of electronic information using the EBU's preferred communications mechanism of OFTp over ISDN. If the files produced by your payroll system are not in the required EBU format our EBU accredited XLATE software can be used to translate files into the correct format.

ODEX provides the electronic connection to Inland Revenue for your organisation. ODEX integrates with your payroll package through picking up files created by your payroll package and sending them onto the Inland Revenue via an ISDN connection.

ODEX can be configured to automatically connect to the Inland Revenue every day to submit and also check for files. When a connection is made ODEX not only sends your files but also retrieves any files the Inland Revenue have sent to you. These files are downloaded to your system and placed in a specified location ready for your payroll package to use.

Figure: IRS Network Structure

PAYE Documents

The electronic link provided by the EBU supports the exchange of the following taxation documents:

PAYE Transactions	Direction	Description
p46	Employer to Inland Revenue	Used when an employee starts a new Employment and does not produce a p45 (3).
p45(1)	Employer to Inland Revenue	Used when an employee ceases an Employment.
p45(3)	Employer to Inland Revenue	Used when an employee starts a new employment.
p160/p46/p45(3) Known as pENNOT	pension payer to Inland Revenue	Used on the retirement of an employee who is to be paid a pension or an annuity.
p6	Inland Revenue to Employer	Sent to employers by the Inland Revenue with coding or amended coding instructions, certain budgetary changes. These are used throughout the tax year
p9	Inland Revenue to Employer	Notice of coding issued towards the end of one tax year giving coding instructions for the next tax year.
p11D	Employer to Inland Revenue	Return of a Director’s or employee’s expenses and benefits during the tax year.
p14	Employer to Inland Revenue	End of year summary showing totals of employee’s pay, tax, National Insurance Contributions (NIC) etc Deducted in the year. This does not include the employer's declaration.
p35 and p38A	Employer to Inland Revenue	Employers Annual Return and Employers supplementary statement with details of employees who were paid over £100 in total for the year but for whom a deductions working sheet was not completed or who were not entered on the p35.
Works Number Update (WNU)	Employer to Inland Revenue	Update of new and amended Works Reference and National Insurance numbers to the Inland Revenue.
Working Families Tax Credit (WFTC)/Disabled persons Tax Credit (DpTC) - TC01 and TC03	Tax Credit Office to Employer	payment of WFTC/DpTC Start and Stop notifications

Data Interchange plc's EDI translator XLATE has obtained certification for the ability to process forms p6, p6B, p9, p45(3), p45(1), p46, p46/p160 pension Notification, TC01, TC03 and WNU. The accreditation was gained against the EB5 (pAYE) Message Implementation Guidelines.

Case Studies

Many of our customers use ODEX Enterprise to send files to and receive files from the Inland Revenue.

Since the Inland Revenue only allows communications via ISDN, ODEX can be used for direct ISDN connections or for TCP/IP connections via a VAN. We recommend our DINET VAN for communications with the Inland Revenue, since DINET, unlike some other VANs, can handle both EDI and GFF format files and does not require any extra addressing information.

Typically, large companies of 250+ employees are required to send End-Of-Year tax documents to the Inland Revenue. ODEX’s reliability and capacity for handling files of up to 1 Gb makes it an ideal choice for sending such time-critical financial files.

ODEX system alerts and e-mail notifications ensure that, for example, payroll administrators are made aware of any files that do not successfully arrive at their destination, and network administrators are immediately informed of any IT problems. Though it is ultimately the user who must ensure that such issues are dealt with in a timely manner, ODEX can be programmed to notify the relevant people of any failures, thus avoiding fines for late receipt imposed by the Inland Revenue.