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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: settlement: by regulation 80 determination

Compliance Activity has been paused until close Wednesday 1 April.  Before undertaking any activity you must read the guidance on when to issue the new COVID19 01 or COVID19 02 SEES letter together with any time-bound statutory notices or assessments.

Most EC cases will be concluded by agreement through Class 6 settlements.

Regulation 80 (SI 2003/No 2682) is used mainly where

  • an employer has failed to deduct tax under the PAYE system and
  • no previous direction has been made for the tax in question to be recovered from the employee.

Where there is a PAYE failure the responsibility for the tax lies with the employer, unless a direction is in place. This applies even when the employee has received a gross amount.

HMRC can make a determination under Regulation 80 of the tax due from the employer. The employer has the normal rights of appeal.

Regulation 80 determinations may be used in EC cases where

  • an employer disputes the taxation treatment of particular payments 
  • attempts to agree a Class 6 settlement have failed or
  • time limits for recovery are an issue and it is apparent that tax might be payable, see COG915215.

Note: A Regulation 80 determination cannot be ‘random’ and made with no apparent justification.  For example, you identified a risk where there may be tax payable that hasn’t been paid, and you are carrying out ongoing enquiries at the time you are considering making the determination. 

The PAYE Manual contains more detail from PAYE54000 onwards.

There is also further guidance at COG231010 Step 9.


The new Appeals Tribunal wish to consider appeals against tax and NIC liability at the same time as appeals against any related penalty determinations. This avoids the expense of two tribunal hearings when, in essence, the same point is being considered.

Therefore, where there is evidence of a liability to a penalty you should commence formal action to raise penalties at the same time as issuing determinations, see COG914175.