HMRC internal manual

Debt Management and Banking Manual

DMBM523090 - Debt and return pursuit: PAYE recovery and associated processes: Regulation 72 (5) directions: Making a decision: employer does not pay the underdeduction

If the employer does not appeal against the refusal notice and/or does not pay the underdeducted tax after 30 days, the caseworker should:

  • phone the employer to request payment and warn the employer that recovery action will be taken to collect the PAYE tax if it remains unpaid after 14 days
  • check to see if the employer has amended their P35 return or sent an amended FPS or EYU after 21 days.

If payment or an amended P35/FPS/EYU has not been received then formal recovery action is required to collect the PAYE.

The caseworker should issue a Regulation 80 determination for the underdeducted tax or refer the case to an office which can issue these determinations.

The caseworker should:

  • send a memo to the submitting office advising that a direction has been refused and return any P400/P227 received with the memo
  • advise the submitting office that the employee should receive a non-refundable credit for the tax underdeducted (if one has not already been given).

In Employer Compliance cases, you should advise the submitting office by memo to include the tax in a settlement and they will be responsible for making any Regulation 80 determinations with the employer.