ECH16015 - Irregularities: Employees for Whom Code Number Not Known - Inadequate Records
Where adequate records have not been kept, the ECO should
- draw the employer's attention to the CWG1 cards regarding the records to be kept
- advise the employer that a return on form P38A may be required by the Tax Office
- not overlook the possibility that
- employees for whom a form P46 signed at Certificate A, B or C is not held, worked for more than one week
- payments above the PAYE threshold were made to employees who worked for one week or less, (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
When investigating such payments
- examine carefully any records that are held
- do not accept explanations at face value
- ask pertinent questions about
- how pay is calculated
- the nature of the work carried out
- the method of recruitment
- ask where the work was carried out with a view to establishing
- the true nature of the payments
- the identity of the recipients
- whether as many workers were needed to do the work as the employer claims
- whether the location of the work is readily accessible to a pool of casuals.
Where the ECO
- discounts that the payments went to regular employees, but
- considers that there is liability in respect of employees for whom codes were not known.
The ECO should
- compute the tax and NICs due
- obtain sufficient evidence to sustain Regulation 80 ECH22090 determinations and/or Section 8 NICs ECH22095 decision should they be necessary
- remind the employer that records of the names and addresses of employees and the amounts paid to them are required to be maintained for
- the PAYE/NIC system to be operated correctly, and
- accurate returns to be made
- where appropriate seek settlement from the employer.
When concluding the review, the ECO should
- advise the PAYE Section and Business Accounts Inspector by memo of
- the instructions given to the employer, and
- an opinion of whether the employer is likely to maintain the required records in future
- request that the Right Track Team be notified if, from the next set of accounts or the answer to question 1 on the next form P35, it is apparent that the employer has not complied with the instructions.
