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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: settlement: direction under regulation 72F: appeals

An employer has no right of appeal against

  • a direction notice under Regulation 72F
  • HMRC’s refusal to make a direction, or

HMRC’s decision whether or not to use a representative sample to determine the amount of tax which it appears to HMRC is likely to have been self assessed by one or more employees, see COG915262.

An employee has the right of appeal against a direction notice, but only on the following grounds:

  • they did not receive a relevant payment
  • where an amount has been specified in the direction notice under Regulation 72F(b)(i) and they think the amount is incorrect
  • no trigger event within Regulation 72E(5) occurred on or after 6 April 2008
  • a trigger event occurred before 6 April 2008.

Where sampling has been used and the direction notice only specifies the employment in respect of which the relevant payment was received, if an employee  

  • appeals against the direction
  • attempts to include tax the employer ought to have deducted as an adjustment under Regulation 185, or  
  • makes an overpayment relief claim under Schedule 1AB TMA 1970 which includes an adjustment for a PAYE credit in relation to the relevant payment for which the direction was made

HMRC can issue a further direction notice specifying the amount actually paid by that employee.

Any appeal by the employee against a notice of direction must be made to HMRC in writing within 30 days of the date of issue of the notice and must specify the grounds of appeal.

An appeal made solely because an employee does not want a direction to be made because the employer’s liability will be transferred to him/her is not valid grounds for appeal under Regulation 72G.

If you believe an employee’s grounds of appeal are invalid you should follow the guidance at ARTG2171.

  • Contact the employee.
  • Say why you do not think the grounds given are valid.
  • Ask the employee to

    • withdraw their appeal, see ARTG2740, or
    • amend their appeal to include valid grounds.

If the employee does not accept that their appeal is invalid, see ARTG2172, but still wants to appeal and does not accept that the grounds for their appeal are invalid:

  • the decision maker should write and tell the employee that if they wish to continue to dispute the matter, they should notify the appeal to the tribunal, see ARTG2400
  • you should tell them that we will apply for the appeal to be struck out as invalid and the tribunal will then decide whether or not it is a valid appeal, see ARTG8340.

Once the direction has been issued you should wait for the 30 day appeal period to end and if no appeal is received the case can be settled (COG915335 - Settlement Process).

Any appeal or appeals by the employee or employees should be dealt with by the caseworker as in COG914305 - Appeals.

For advice regarding late appeals, refer to ARTG2240.