Supporting Guidance: employer compliance: guidance by subject: commencing the compliance check: failure to retain records
PAYE and NICs
An employer is required by Regulation 97(8) (Income Tax (Pay as you Earn) Regulations 2003 (SI 2003/No.2682)) to retain records for at least 3 years after the end of the tax year to which they relate. Where an employer has failed to do so, you should inform the employer of his obligations by referring them to the guidance on gov.uk - https://www.gov.uk/paye-for-employers/keeping-records and
- advise the employer to retain the appropriate records for the future
report the details of the failure, including copies of written instructions to
- the IT/CT Caseworker using the Cross Tax Referral stencil.
Where it is necessary to reconstruct the entries on DWS, you should
- follow the instructions at COG906160.
A contractor is required by Regulation 51 (10) The Income Tax (CIS) Regulations 2005 to keep records for at least 3 years after the end of the year to which they relate. If the contractor has failed to do so, you should
- inform the contractor of his obligations by referring them to the guidane on gov.uk - https://www.gov.uk/what-you-must-do-as-a-cis-contractor/record-keeping, then
- follow the same procedures as for PAYE and NICs
- If gross payment status (GPS) is held the contractor must be advised of the potential to have the GPS withdrawn. See COG910110. All considerations for withdrawal of the GPS (Mandatory 90 day and immediate removals) must be submitted by the caseworker via their manager to the Functional Lead team (CIS Technical Support). See CIS Functional Lead Team.
Where an employer in the road transport industry has failed to retain tachographs, you should see COG908670.