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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: PAYE: in-year process: quantification: details needed

From the employer

We expect the employer to provide information, or to produce a document which is needed for the purpose of checking their PAYE position. The information we require would always form part of the employer’s statutory records.

Statutory records means records that are required by law and for PAYE and are defined as all wages sheets, deductions working sheets, P46 forms for low-paid employees that were not sent to HMRC and any other documents and records that relate to

  • the calculation of PAYE income for employees
  • any other relevant payments to employees
  • the deduction of tax from such payments, for example P45s, coding notices
  • all documents relating to information which an employer is required to submit to HMRC under Regulation 85 that is contained on forms P11D and P9D
  • the deduction of tax from any amounts they’ve received working in the construction industry (limited companies only)

An employer has flexibility about the records they keep and you will increasingly find documents kept in electronic format.

For quantification purposes it is acceptable for the employer to provide you with extracts of the electronically stored records where these help you to establish the PAYE debt. When required a taxpayer must assist an officer in accessing computer records and a fine may be imposed if access is obstructed or if they fail to comply in a reasonable time.

From the quantification

You must note the following information from the employer’s records

  • total tax deducted
  • any refunds not already included
  • subcontractor deductions
  • total NIC deducted (employer and employee)
  • total Student Loan Deductions deducted
  • SSP, SMP, SAP and SPP
  • tax deductions suffered as a contractor (limited companies only)
  • the amount withheld under the NIC Holiday Scheme if appropriate.

From the figures noted, the net monthly amount due is worked out by

Adding together

  • tax deducted from employees
  • student Loan Deductions (SLD) made from employees
  • deductions made from payments to subcontractors
  • NICs (employers and employees contributions) due.

Then subtracting

  • tax refunded to any employee
  • SSP recovered
  • SMP/SAP/SPP and any NIC compensation recovered
  • any NIC rebate
  • tax deductions suffered as a contractor (limited companies only).

Finally

  • deduct any payments already made from the net figures to give the amount due for the period of your quantification

deduct any Class 1 Employer’s NIC deduction withheld under the NIC Holiday Scheme if appropriate