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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE recovery and associated processes: Regulation 72 (5) directions: Making a decision: employer continues to dispute the worker’s status

You may be requested to give an informal opinion as to whether a direction would be issued in a status dispute.

This may arise in cases where the employer is now operating PAYE on the worker and other individuals whose terms of employment are similar, but the employer will not pay the PAYE tax and will appeal if a Regulation 80 determination is issued.

If the employer asks HMRC for a direction you can give an informal opinion as to whether will be issued without prejudice to any eventual appeal against a Regulation 80 determination. You should:

  • tell the status inspector or Employer Compliance (EC) that you will informally give an opinion and they should not issue the Regulation 80 determination until you have done so
  • consider the issues in the same way as a formal status case.

If there is sufficient evidence to confirm that the employer did take reasonable care and the error was made in good faith then you should advise the status inspector or EC of your opinion.

If there is insufficient evidence, tell the status inspector or EC it is unlikely you would issue a direction if the employer formally asked for one.

Do not issue a refusal notice because your consideration of the case is informal. As the employer is still contesting the PAYE liability the appropriate way forward is to issue a Regulation 80 determination.

If a Regulation 80 determination has been issued HMRC cannot issue a direction under Condition A because of Regulation 80 (3).