DMBM523710 | Debt and return pursuit: PAYE: legislation/regulations: payment and returns

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Regulations concerning payment of employers’ / contractors’ deductions, which form the basis for compliance action, are contained in the Income Tax (PAYE) Regulations 2003.

Below shows a selection and their effects.

Payment and recovery of tax

• Payment of tax monthly by employer - 69(1)

• Payment of tax quarterly by employer - 70(1)

• HMRC will give a receipt for payment on request - 69(2), (3)

• Direction to recover from employee tax not deducted in error by employer - 72(3) Condition A

• Direction to recover from employee tax not deducted through wilful failure by employer - 72(4) Condition B

• Interest on tax due from employee - 72 (7), (8)

• Employer entitled to recover repayments from later deductions - 68(3), (4) & 71(4)

• Trade disputes - repayments not made payment to HMRC - 64(8)

• Certificate of interest due from and unpaid by employee - 218(3)

• Challenge to HMRC certificate - 218(6)

HMRC notice (P100)

• Authority to issue P100:

  • requiring employer to make return of tax due when no payment made - 77(1), (2) - from October 2011, P100s are no longer issued

  • when dissatisfied with amount paid - 77(1), (3).

• Period of notice:

  • period in which employer must return notice - 77(4)

  • period included in notice (no of months) - 77(5).

• Tax recoverable as if it were an assessment - 84(2)

• Collector’s certificate prepared from employer’s return - 77(6)

• Prepared certificate is sufficient evidence of debt - 218(1)

• Challenge to HMRC certificate - 218(6)

HMRC notice form P101

• Criteria and authority for HMRC to issue P101 to employer - 78 (1), (2), (3), (4)

• Timing of issue of P101 (number of days after month end) - 78(1)

• Collector’s judgment based on previous payments - 78(4) (a)

• Authority to issue notice for periods covering 2 or more months - 78(5)

• Authority to issue notice when HMRC dissatisfied with amount paid - 78(3)(b)

• Employer may request inspection of records during 7 day time limit on HMRC notice - 78(6)

• Preparation of Collector’s certificate after 7 day time limit - 78(8)

• Employer’s response within notice period - 78(9)

• Collector’s certificate is sufficient evidence of debt - 218(1)

• Employer’s right to recover overpayments from deductions in subsequent tax periods in that tax year - 78(11)

• Employer’s right to repayment of tax overpaid after end of year return submitted - 78(13)

Recovery of tax

• Time limit for summary proceedings - 84(3)

• Power to recover aggregate of deductions due from employers - 84(4), (5)

• Certificate of debt - 218(1), (2)

• Challenge to HMRC certificate - 218(6)

Return at year end (P35, P14s)

• Employer’s obligations to make end of year return - 73

• Return by company to be signed - 73(8)

• HMRC authority to certify and recover unpaid tax - 76

• Time limit for summary proceedings - 84 (3)

Inspection of employer’s record

• Employer’s obligation to produce PAYE records for inspection by HMRC - 97(1), (2)

• HMRC’s authority to certify tax due and payable - 79(2)

• HMRC authority to recover unpaid tax certified - 84(3)