(Draft) ESM10039 guidance: Off-payroll working – setting off Tax and National Insurance contributions already paid: appeals
Published 25 January 2024
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This publication is available at https://www.gov.uk/government/consultations/calculating-paye-liabilities-in-cases-of-non-compliance-for-off-payroll-working-ir35/draft-esm10039-guidance-off-payroll-working-setting-off-tax-and-national-insurance-contributions-already-paid-appeals
Worker/intermediary
Where HM Revenue and Customs (HMRC) has issued a direction notice, a worker or intermediary has the right to appeal. The appeal must be made in writing to HMRC within 30 days of the issue of the direction notice. The appeal must specify the grounds of appeal or it will not be valid. At this stage the worker or intermediary should provide HMRC with any supporting evidence relevant to the appeal.
The specific grounds of appeal allowed are that:
- the worker, the intermediary, or the worker and intermediary did not receive the deemed direct payment
- no tax has been paid on the deemed direct payment
- no trigger event occurred
- the amount set-off is incorrect
HMRC will review the grounds of appeal and any supporting evidence and provide a written response.
If a worker or intermediary still disagrees with HMRC’s decision following a review, they can appeal directly to a Tribunal. This must be done within 30 days of the date of HMRC’s decision.
Deemed employer
A deemed employer is not able to appeal against a direction notice, or the fact HMRC did not issue one. If a deemed employer disagrees with the amount of set-off which has been calculated, it can provide evidence that a different amount of set-off is due. HMRC will review any information supplied and consider amending the direction notice.
National Insurance contributions (NICs)
For NIC’s purposes, where there is a dispute relating to a direction by HMRC, a formal decision will be issued under Section 8 Social Security (Transfer of Functions) Act 1999. Any person named on the Section 8 Notice has the right to appeal against it. For an appeal against this Notice to be valid it must specify the grounds of appeal.
Where a NICs decision is issued to an entity resident in Northern Ireland, this will be issued under Article 7 Social Security Contributions (for example, Transfer of Functions)(Northern Ireland) Order 1999, but the same appeal rights will apply as under Section 8.