Supporting Guidance: employer compliance: guidance by subject: free of tax payments: FOT system in operation - checks to perform
Where you establish that a Free of Tax (FOT) system is in operation, you should
- spot check that the amount actually paid to the employee agrees that entered at column 2 of form P11(FOT).
If the figure is less than the amount paid to the employee, you should
- extend the check and
- ask the employer whether the untaxed payments are intended to be paid ‘net’.
Where the employer intended to make the payments ‘net’ you should
- explain to the employer that open years should be corrected by
- increasing the net pay figure at column 2 of form P11(FOT) by adding the untaxed pay and consequently amending each column of form P11(FOT)
- paying the additional tax and NIC due with the next remittance
- seek recovery for closed years, where appropriate by following the guidance at COG913030