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HMRC internal manual

Debt Management and Banking Manual

Interest: Interest Review Unit (IRU): PAYE and National Insurance Contributions: Delay in opening a PAYE scheme for a new employer

From mid-February 2005, when a new employer contacts the ‘New Employer’sHelpline’, a letter should be sent within two working days telling them:

  • their employer’s reference numbers;
  • their HMRC office name and address details; and
  • useful contact details.

Where a ‘New Employer’s Starter Pack’ is requested the letter will be included inthe pack.

This process provides an efficient method of

  • setting up the new PAYE scheme: and
  • sending the payslip booklets to the employer.

The time taken to set up a scheme should not normally have an effect on the employer’sability to pay the tax, etc. when it becomes due.

When an objection to interest is received on the grounds that there was a delay in openinga PAYE scheme, consider the following

  • the date the new business started;
  • the date the new employer contacted HMRC to ask for a PAYE scheme to be opened;
  • what information or advice was given or sent to the employer; and
  • the actions taken to open the scheme.

Where the facts indicates that there may have been unreasonable HMRC delay in opening ascheme, consider giving up interest in line with the guidance given at DMBM405010.

Delay in trying to collect an underpayment

Objections to interest based on HMRC delay in asking for or trying to collect anunderpayment should be considered in line with the guidance given at DMBM405010.

When looking at the facts of the case, take the following points into account

  • when the End of Year (EOY) Return was received (must reach us by 19 May after the end of the deduction year);
  • was there correspondence between us and the employer; and
  • was the underpayment noted on the P35 or did it emerge at a later date.