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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: employer or contractor has lost their records: existing debt(s)

Unless the possibility of unreasonable distress or the likelihood of adverse publicity arises, you can commence or continue enforcement action for any debts. The action you take will depend upon whether:

  • the employer is not going to continue to trade
  • how long it will take to obtain the information from any back-up records
  • the debt has been established
  • for what periods the records have been lost.

Employer not continuing to trade

If this is the case, find out what will happen to the business and proceed accordingly (for example, cessation or succession).

Back-up records available

Establish how long it will take to obtain the records and ask the employer for a payment on account now. Advise that any balance will be due seven days after the records have been obtained and BF the case accordingly.

Established Debt

Any debts that were established (by P101 or quantification) prior to the loss of the records, can be enforced but you must advise the employer/contractor that action will continue for the amount outstanding.

If you have issued a P101 or an IDMS99 and the employer tells you that they can not give accurate figures because of the loss:

  • advise that you will not pursue the P101 amount yet
  • ask the employer to make a payment on account
  • agree a BF date (within the next 30 days) by which time the employer will provide the correct figures or their estimate. If the employer can’t provide a date, follow DMBM523330.

If the employer provides the correct figures or an estimate, you should ask for payment and warn the employer of enforcement action if they do not pay within seven days. If the employer does not pay, you can enforce the debt.

Non-established debt

If the debt has not been established, you can:

  • issue a P101 if appropriate - but proceed the same as the ‘back up records available’ guidance (above) if the employer can not pay, or establish their correct PAYE payment
  • issue an IDMS99 or send the case to the Field Force for quantification - providing that the employer’s undamaged records cover this period. If not, agree a BF date (within the next 30 days) by which time the employer will provide the correct figures or their estimate. If the employer cannot provide a date, proceed as per DMBM523330.