DMBM523280 - Debt and return pursuit: PAYE: Regulation 72 (5) Income Tax (Pay As You Earn) Regulations 2003: completion of cases: if the employer remains liable

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Once the thirty day appeal period has elapsed and the employer accepts the error or the employers appeal has not been allowed, the caseworker should send a memo to the submitting office to confirm the employer is liable for the PAYE tax and the matter is concluded.

The memo should include the:

• name of the employer
• employer reference
• employee’s name
• employee’s National Insurance number
• amount of tax payable.

Note: The caseworker should advise the submitting office to allocate a credit within NPS on the employee’s record for the tax which should have been deducted if it is likely that the employer will not file an amended return.

If the employer has sent an amended P35/FPS or sends an EYU then the submitting office need not allocate a credit because the amended returns information should feed through to the employee’s record. It is important to check this has happened.

It is necessary to ensure the employer amends their P35/FPS or sends an EYU, because the refusal notice does not strictly empower HMRC to recover PAYE on the back of it.

If the employer fails to make such amendments, then HMRC should issue a Regulation 80 determination to formally recover the PAYE as a debt.

If the employee is within Self Assessment they will have been advised to amend their return to take account of the tax that the employer should have deducted when they made first contact with HMRC.