ECH22090 - Settlement: By Regulation 80 Determination

Most EC cases will be concluded by agreement through Class 6 settlements.

Regulation 80 (SI 2003/No 2682) is used mainly where

• an employer has failed to deduct tax under the PAYE system and
• there has been no previous direction that the tax in question should be recovered from the employee.

It follows that where there is a PAYE failure, the responsibility for the tax lies with the employer, unless a direction is in place. This applies even when the employee has received a gross amount.

HMRC can make a determination under Regulation 80 of the tax due from the employer. The employer has the normal rights of appeal.

Regulation 80 determinations may be used in EC cases where

• an employer disputes the taxation treatment of particular payments or
• where attempts to agree a Class 6 settlement have failed.

The PAYE Manual contains more detail.

Where there is evidence of a liability to a penalty you should

In non contentious cases

• wait 30 days from the issue of the determinations
• obtain confirmation of whether an appeal has been received and
• if no appeal has been received commence formal action to raise penalties (ECH21135).

In contentious cases or where an appeal is received

• commence formal action to raise penalties (ECH21135)
• write to the employer to advise that this is being done.