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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: working the case: reconstructing records

There may be occasions when an employer’s/contractor’s records are so muddled, incomplete or inaccurate that Deductions Working Sheets require reconstruction to arrive at an estimate of the wages/payments paid and the related PAYE, NIC, CIS deductions, SLDs due.

In such cases the application of the normal Employer Compliance checks may be of little value or may not be possible. You should therefore

  • focus enquiries on interviewing the employer/contractor, and
  • seek to establish whether the state of the records is due to

    • failure to take reasonable care, inefficiency, carelessness or neglect, or
    • a deliberate attempt to hide inaccuracies.

Where inaccuracy is not established or suspected

  • advise the employer/contractor how to keep proper wages/CIS records for the future
  • supervise the reconstruction of records for, say, the previous month
  • report the facts to

    • the Employers Section via WAM to North East Metropolitan Area WAM, and
    • the ITSA/CTSA caseworker on the Cross Tax Referral stencil (COG915100).

Where inaccuracy is established or suspected

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000) COG904570(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

  • follow the guidance above under the heading ‘where inaccuracy is not established or suspected’.

Where the criteria to extend the compliance check are satisfied (COG906090)

  • estimate the amounts underpaid for earlier years (COG908090)

    • using any records considered to be accurate, and
    • the information gained from interviewing the employer/contractor COG905275.