Next steps — correcting errors, guidance and legislation (part 14)
Updated 15 December 2023
HMRC will not provide clearance of status determinations, or give advance approval for your systems and processes. However, we will stand behind determinations made using the Check Employment Status for Tax tool (CEST) tool, as long as the information you use to arrive at the determination remains accurate, and is in line with HMRC’s guidance.
Correcting an error
Your organisation may recognise new elements of best practice, after you have read these guidelines. Implementing these can lead to improvements to your systems and processes.
Improved systems and processes might also lead to you identifying that you’ve underpaid tax in the past. If you find an error, you must correct it, whether it happened in the current year, or a previous one.
What to do
If you discover that there has been an error in your RTI (Real Time Information) submissions to HMRC, because you’ve incorrectly determined a worker’s off-payroll status, you must:
- where possible, submit the correct figures to HMRC using the appropriate RTI submission — read more about fixing problems with running payroll
- make a voluntary disclosure to HMRC, explaining the errors and calculating the income tax and National Insurance due
- send the details of your error to your Customer Compliance Manager (CCM), if you have one
You’ll have to pay interest on any late payments of tax, from the date they were originally due, until the date you pay what you owe. HMRC may also charge you a penalty on any underpaid taxes. Although the rate of the penalties will vary depending on your circumstances, they’ll usually be lower if you make a voluntary disclosure.
If you’re making a voluntary disclosure after reading these guidelines, include the Guidelines for Compliance reference number (GfC4) as part of your disclosure. This will help HMRC to assess the value of our education and support.
Further questions
If you have any further questions after reading these guidelines, you can email us.
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Make sure you include the Guidelines for Compliance reference number (GfC4) in the subject line. If you have a Customer Compliance Manager (CCM), copy them into the email.
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Send your questions to ccgguidelinesforcompliance@hmrc.gov.uk.
Sending information to HMRC by email carries certain risks. We assume that, by sending information in an email, you understand and accept these risks.
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Legislation and guidance
The legislation relating to off-payroll Working is Chapter 10, part 2 Income Tax (Earnings and Pensions) Act 2003.
Off-payroll working guidance
The main sources of available guidance relating to the off-payroll working rules include:
- information about employment status, in HMRC internal manual ESM10000
- various guidance on off-payroll working
- help to understand off-payroll working
- the off-payroll working rules for clients
- the off-payroll working rules for agencies
- help with deemed employer responsibilities
Guidance on the Check Employment Status for Tax (CEST) tool
This includes:
- the Check Employment Status for Tax (CEST) tool
- the questions asked by the CEST tool, in HMRC internal manual ESM11000
- information about employment status indicators, in HMRC internal manual ESM0500
Status decision making guidance
This includes:
- an overview on employment status
- information about employment status indicators, in HMRC internal manual ESM0500
Guidance on reducing risk when using umbrella companies
Read HMRC’s main guidance on umbrella companies.
Contact HMRC about off-payroll working
Get the correct details you can use to contact HMRC about off-payroll working.