ECH22097 - Settlement: Payment Sought From Employee

Exceptionally there are occasions when an employer is approached to settle liability but responsibility for payment is removed and placed on the employee or director by means of a direction and/or decision.

For Tax

• Regulation 72(5) Condition A (see ECH22100) or
• Regulation 72(5) Condition B (see ECH22101) where HMRC are of the opinion that
• • the employee received emoluments knowing that
  • the employer has wilfully failed to deduct the amount of tax he was liable to deduct (see INS8100 onwards)

• Regulation 81(4) Condition A or Condition B following an amount determined under Regulation 80(2) ( ECH22102)

For NICs

Regulation 86(1)(a)(ii) Social Security (Contributions) Regulations 2001

• where there has been a failure to pay primary contributions
• the primary NICs were not deducted from the earner, and
• the earner knows that the employer wilfully failed to pay them to HMRC.

NOTE: These two sets of Regulations do not mirror each other.

Section 121C Social Security Administration Act 1992

• for Personal Liability Notices (PLN)
• • See NIM12201 onwards, but
  • NIM12209 is no longer relevant and any queries should be referred to Insolvency Compliance and Securities (ICS) part of National Teams & Special Civil Investigations (NTSCI)