PAYE46050 - employer returns: employer return post capture: form P227 and regulation 72
'Important' and 'Unimportant' errors
You will use different methods to resolve error(s) made by an
employer, depending upon the 'importance' of the error.
An employer's error may be considered as 'unimportant' if it
is due to lack of attention rather than incorrect application of
instructions or procedures. Size does not itself make an error
'important'.
The Debt Management Office must
always get form P227 and a report where the
employer has
- Underdeducted tax of more than £100 from any single employee
- Failed to add back refunds not made to employees because of a trade dispute and there are 'important errors'
- Failed to operate PAYE satisfactorily
Regulation 72
Detailed guidance on the Debt Management Office's involvement
in Regulation 72 provisions can be found in the PAYE Instructions
(Collection) Manual from PA6.100
An employer can be held responsible only for the tax that the
PAYE Regulations required them to deduct. If an under deduction
arises
through no fault of the employer, then Regulation
72
does not apply.
Only the Debt Management Manager can relieve an employer of
his responsibility for payment of tax under-deducted from an
employee's earnings by means of a
'formal direction' on form P106 under Regulation
72.
The Debt Management Office has three possible courses of
action
- To make a formal direction under Regulation72
- To collect all of the under deduction
- To collect some of the under deduction and make a direction under Regulation 72 for the balance
They will also collect any refunds due to employees after a
trade dispute.
Any queries regarding a Regulation 72 direction must be
referred to the Debt Management Office.
Regulation 80(3)
Regulation 80(3) precludes recovery under Regulation 72 once
a determination is made.
If you are required to deal with such a determination follow
the Action Guide 'Regulation 80 Determinations'
PAYE46091.
