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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Alternative rights of recovery (PAYE directions): further action when a direction seems appropriate: direction cases - assessed tax liability and interest

The employee’s liability which arises from a direction is brought into charge as detailed in the following table. The table also gives details of interest and surcharge payable.

Year of assessment Method of bringing tax to charge Interest Surcharge
2004-05 onwards Enter, or amend, the amount on the taxpayer’s SA record by agreement, or following a Section 9A enquiry, or after making a Discovery assessment. Directions made under the PAYE Regulations are subject to interest under Regulation 72(7)/Regulation 81(6) and Section 86 TMA. Interest is chargeable from a relevant date of 19 April next following the year of assessment.  
(See COG931740)   Tax remaining unpaid is subject to 5% surcharges at 28 days and 6 months following the due date.

Although an employer’s PAYE under-deduction will be established before a direction can be made, it does not necessarily follow that there will be similar tax liability under Self Assessment. For example, there may be further allowances to which the employee is entitled that may considerably reduce the final tax calculation.

You will need to consider whether a direction is still worthwhile in the light of the amount of assessed tax that would be due from the employee. Obviously there is no point in continuing if no or very little tax will be collected as a result.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)