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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: computations: accepting less than the full employer liability

Where liability is included in a computation but the employer claims that the employee’s actual liability is less you should

  • consider whether there is sufficient evidence to support the claim for example

    • does the individual’s tax record confirm that allowances are available to off-set against the tax computed
    • is the reduced liability considered to be equal to the theoretical underpayment arising from the employee’s self assessment (arrived at by assuming all earnings are assessed and PAYE tax credits are withheld from the assessment)

When satisfied that the employee’s actual liability is less than is legally due from the employer, you should

  • adjust the computation accordingly

When not satisfied that the employee’s actual liability is less than is legally due from the employer, you should

  • tell the employer that

    • the liability has been computed in accordance with the PAYE and NIC Regulations, and
    • if agreement cannot be reached formal action will be taken to seek settlement of the sum

If a further compliance check reveals similar inaccuracies you must

  • still treat any claim by the employer on its merits.