ECH12035 - Computations: Benefits in Kind - Employer Not Willing to Settle Employees' Liability
Where the employer is not willing to meet the employees' tax liability the options available are
- recovery of the tax from the individuals. See ECH6120.
- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
- consideration of formal action for penalties in respect of incorrect P11Ds, ECH21045 refers.
In some cases drawing attention to these options and restating the mutual advantages outlined at ECH15005 may persuade the employer to volunteer an acceptable offer.
- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Where the employer is willing to settle the employees’ tax liability but declines to settle the NIC on the tax borne, you must
- question the employer to establish the reason for the refusal
- point out the advantages of including the amount in a contract settlement
- there will be no requirements to identify the precise amount of tax being paid in respect of each employee
- estimates can be used to calculate the amount of NIC due, see ECH12045 onwards
- the employer will not have to identify the relevant pay periods and include the NICs on the payroll.
If the employer remains unwilling to include the NICs in the contract settlement you must
- revisit any computations based on estimates and seek actual figures on which to calculate the actual amount of tax due
- provide written instructions as to how the employer should account for the NIC
- consider follow up action to ensure the NICs have been accounted for via the payroll, especially where the employer has indicated there is no intention of accounting for the NICs either by contract or payroll, or
- make a referral to RIS via the automated mailbox process for possible future action
- include the following statement in the letter of offer immediately above Statement B
‘it is understood and agreed thata this offer excludes any liability for National Insurance Contributions in respect of tax paid on behalf of employees’.
If the employer does not account for the NICs via the payroll you should
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Contact Central Policy TAA in cases of difficulty.
