ECH12065 - Computations: Equitable Liability

Where liability is included in a computation but the employer claims that the equitable liability is less you should

• consider whether there is sufficient evidence to support the claim i.e. could the recipient sign a retrospective P46 proving that the employer may not need to deduct tax?

When satisfied that the equitable liability is less than that legally due you should

• adjust the computation accordingly

When not satisfied that the equitable liability is less than that legally due you should

• tell the employer that
  
  
• • the liability has been computed in accordance with the PAYE and NIC Regulations, and
  • if agreement cannot be reached formal action will be taken to seek settlement of the sum

If a further compliance check reveals similar irregularities you must

• still treat any claim by the employer to equitable liability on its merits.