EM8710 - Close Companies: Settlement: Employment Income Route: Regulation 72 Direction

Where a direction under Regulation 72 (Income Tax (Pay as you Earn) Regulations 2003) is required EM8701 this should be obtained from the appropriate office in your region who will need to be satisfied that

• remuneration has been received
• an under-deduction has taken place
• there has been a wilful failure on the part of the employer to deduct tax
• the employee was aware that the wilful failure was taking place.

Your submission should contain the following information.

• The background to the case outlining why the untaxed amounts are to be regarded as remuneration.
• The background of the employee, covering the position held, the part played in the management of the company and the control of its finances and any other information relevant to the taxpayer's knowledge of PAYE or the taxpayer's knowledge of its operation by the company.
• A schedule showing details of the PAYE irregularities for each year, to include

• the total remuneration paid by the employer
• the amount of remuneration untaxed
• the tax under-deducted thereon
• the remuneration and tax deducted already accounted for on forms P35/P14 or Regulation 80 determinations.

• A summary of the employment income liability for each relevant year together with details of the current assessing/self-assessing position for those years, including any appeals made.
• Evidence that the District has informed the employee that a direction is being sought in respect of untaxed remuneration and given him or her the opportunity to make any representations on the matter.

The submission should be accompanied by the individual's personal file, the company file, the employer's file and the enquiry papers.

If the employee continues to object after the direction has been made, the papers should be referred back to the appropriate regional office for advice on the action to be taken.