ECH19010 - Free of Tax Payments: FOT System in Operation - Checks to Perform

Where you establish that a Free of Tax (FOT) system is in operation, you should

• spot check that the amount actually paid to the employee agrees that entered at column 2 of form P11(FOT).

If the figure is less than the amount paid to the employee, you should

• extend the check and
• ask the employer whether the untaxed payments are intended to be paid ‘net’.

Where the employer intended to make the payments ‘net’ you should

• explain to the employer that open years should be corrected by
  
  
• • increasing the net pay figure at column 2 of form P11(FOT) by adding the untaxed pay and consequently amending each column of form P11(FOT)
  • paying the additional tax and NIC due with the next remittance

• seek recovery for closed years, where appropriate by following the guidance at ECH19015.