ECH19015 - Free of Tax Payments: FOT System Applicable But Not Used

Where the employer has made ‘net’ Free of Tax (FOT) payments and the FOT system is applicable but has not been operated ( ECH19005) you should

• explain the obligations of an employer operating a FOT arrangement as outlined at PAYE20035
• arrange for a FOT package to be sent to the employer PAYE20035, or
• alternatively advise employer to apply for a FOT package online via the HMRC Internet site
• explain to the employer how to make the necessary open year adjustment, and
• seek recovery for closed years
  
  
• • using Tax Table G

To determine the NICs due, you should

• calculate the true gross pay by adding
  
  
• • the amount actually paid to the employee, and
  • the ‘tax payable’ as computed above

• then calculate NIC on the true gross pay.

When computing the total underpayment

• take into account any tax and NIC already paid by the employer.