PAYE46085 - Employer returns: employer return post capture: regulation 72

There are various methods available to resolve error(s) made by an employer. The method used will depend on the type of error that is discovered.

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 if he considers that the employer made a genuine error in good faith.

For further information on Regulation 72 see subject 'Form P227 And Regulation 72’ PAYE46050.

Regulation 72 

Unless Regulation 72 applies, under deductions of tax are, in the first instance, recoverable from the employer. The Debt Management Office will only consider action under Regulation 72 where

• The employee received the earnings knowing that the employer's failure was wilful
• In the case of directors the prospect of recovery from the company are poor, for example

• The company is insolvent

Or

• Thought to be in serious financial difficulty

• It may also be used for other employees who are not directors but who are in a position to arrange for their earnings to be paid without deduction of tax, for example

• Managers
• Company accountants
• Wages clerks
• Officers of a club or other unincorporated body

Regulation 80

Regulation 80 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.