This regulation deals with the notice and certificate procedures
where, 17 days or more after the end of a tax period, either of the
following conditions apply: (A) the contractor has not paid any
amount during the tax period and HMRC believes an amount is due for
that tax period; (B) the contractor has paid an amount of
deductions over during the period but HMRC is not satisfied, after
seeking the contractor’s explanation, that it is the full
amount: SI2005/2045 reg 11(1), (2) and (3).
If either of the conditions are met, HMRC can look at the contractor’s previous payment record and specify, to their best judgement, an amount which they consider is due and payable and may serve a notice on the contractor requiring that amount to be paid within 7 days of the issue of the notice: SI2005/2045 reg 11(4).
If condition (A) is met in respect of two or more consecutive tax periods in a tax year, HMRC can give notice under (4) as if the consecutive periods were the latest tax period specified in the notice: SI2005/2045 reg 11(5).
If, during the notice period, the contractor claims that they have paid over the full amount of deductions but HMRC are not satisfied, the contractor can ask HMRC to inspect the contractor’s records as if they had been required to produce them under SI2005/2045 reg 51: SI2005/2045 reg 11(6).
Where HMRC does inspect the records in accordance with SI2005/2045 reg 11(6) and SI2005/2045 reg 51, any notice issued by HMRC under SI2005/2045 reg 11(4) is to be disregarded: SI2005/2045 reg 11(7).
Any amounts unpaid at the end of the period of the notice made at SI2005/2045 reg 11(4) are treated as though they were due in accordance with SI2005/2045 reg 7 and HMRC can prepare a certificate showing amounts unpaid: SI2005/2045 reg 11(8).
If, during the notice period, the contractor settles all outstanding amounts or satisfies HMRC that no monies are due, then SI2005/2045 reg 11(8) does not apply: SI2005/2045 reg 11(9).
If the contractor settles the amount certified by HMRC and it transpires that the amount due was a lesser amount, the contractor is entitled to offset any excess monies against sums due for a later tax period in the tax year: SI2005/2045 reg 11(10) and (11).
Sub-section (12) refers to SI2005/2045 reg 57 which deals with the use of certificates as evidence of sums due and payable.
ENABLING PROVISION – FA04/S71 (1)