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HMRC internal manual

Compliance Operational Guidance

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

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 or
  • where attempts to agree a Class 6 settlement have failed
  • where time limits for recovery are an issue, see COG915215.

The PAYE Manual contains more detail from PAYE54000 onwards.

There is also further guidance at COG231010 Step 8.


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, see COG914175, at the same time as issuing determinations.