Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting guidance: employer compliance guidance by subject: commencing the compliance check: obstructive employer - challenge to caseworkers entitlement to inspect records

Where an employer, contractor or agent

  • challenges your right to inspect or review records, or
  • is reluctant or refuses to produce particular records

you should

  • refer them to the appropriate general information factsheet CC/FS1 (a or c)
  • explain the need to verify that the systems in place support the employer/contractor in meeting his statutory obligations by verifying entries in the records, for example

    • cash books
    • ledgers
    • petty cash books
  • advise that to avoid any misunderstanding about what constitutes payment for tax and NIC purposes all

    • payment records
    • records relating to the calculation of wages, and
    • payments to subcontractors

should be produced for review

  • point out the Regulations provide the statutory right to inspect records wherever they are held
  • provide appropriate factsheets.

Where

  • wages or salaries and payments to subcontractors are drawn or paid by cheque and the employer/contractor resists a request to inspect the cheque stubs, or
  • wages, payments to subcontractors or expenses are paid via petty cash the employer/contractor resists a request to see the petty cash vouchers

you should

  • maintain that the records relate to the payment of earnings within the meaning of the PAYE, NIC and CIS Regulations.

Where you have confirmed to the employer/contractor that sight of the records is essential and access is still denied, preventing the case from proceeding, you must

  • report the facts to the Senior Manager for consideration of formal action in accordance with CH253500.

Where there is no evidence to support the payment of wages, salaries, payments to subcontractors or expenses by cheque or via petty cash you must

  • not pursue sight of the records, and
  • note the facts on the case papers.