INS8202 - Further action when a direction seems appropriate: Investigating the PAYE failure

The referrals received via the Specialist Investigations Rig/Risk teams may not contain the full story of PAYE/NICs failure and the caseworker must examine all available information and printouts to find out the full extent of PAYE/NIC failure involved. Care must be taken to ensure that

• Regulation 72(5) and Regulation 81(4) Condition A or B factors (and, where appropriate, for 2004/05 onwards the Employees Class 1 Nic) are considered
• failures for all years are investigated
• in liquidation and cessation cases all the remuneration paid to the date of liquidation or cessation is investigated
• any other directors or ‘controlling’ employees (see INS8111) for whom under-deductions may exist are looked at
• any other employers who may have failed to operate PAYE for the employees under review are looked at
• (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)

It is often advantageous to obtain an overall picture of the operation of PAYE on directors’ remuneration so that you can

• establish the employer’s pattern of working
• pinpoint how and when PAYE failure first arose
• respond to any correspondence.

So you should consider starting your investigation of the PAYE position one or more years prior to the first year of reported failure.