Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer records: set up employer record: election for separate schemes - appeals (Action Guide)

An improper purpose is essentially for the purpose of reducing scheme size in order to achieve one or more of the following

  • Avoid the requirement imposed on large and medium employers to file an annual return online
  • Avoid the requirement imposed on large employers to make payments electronically
  • Receive an incentive payment as a small employer for voluntarily filing an annual return online

To deal with an appeal against an improper purpose notice, follow steps 1 - 16 below. The guide is presented as follows

  Step 1
   
  Steps 2 - 5
  Steps 6 - 7
  Steps 8 - 9
  Steps 10 - 11
  Steps 12 - 13
  Steps 14 - 16

For details of how to access any of the Employer Business Service functions, use PAYE057.

Initial action

1. All appeals must be dealt with as priority and submitted to a higher officer for guidance
   

Acceptance of the appeal

|   | If, after submission, it is agreed that the appeal be accepted | || | 2. | Use Function EMPLOYER SET UP to open a new employer record | |   | See the Action Guide at PAYE20136 | | 3. | Use Function AMEND EMPLOYER SCHEME HISTORY to set the dormant indicator for the current year and make the employer record active from CY+1 | | 4. | Write to the employer and advise them | |   | * That the improper purpose notice is withdrawn | |   | * That the appeal is settled under Section 54, Taxes Management Act 1970 | |   | * That a new employer record has been opened which will be active from the following 6 April | |   | * Of the employer reference allocated to the new employer record
 
And remind the employer that | |   | * Forms P45 Part 1 are to be issued after 6 April for those employees moving to the new employer record | |   | * Forms P45 Part 3 are to be sent showing the new reference | | 5. | Use Function AMEND EMPLOYER NOTES to | |   | * Record receipt of the appeal | |   | * Record the date appeal was settled |

Unacceptable appeals

  If we do not agree and the appeal cannot be accepted
   
6. Write to employer and
  * Explain the appeal cannot be accepted, giving our view of the matter and offering a review. See ARTG2190 for what this letter must cover
7. Use Function AMEND EMPLOYER NOTES to
  * Record receipt / progress of the appeal and if you do not hear anything with 45 days the appeal is to be treated as settled by agreement under section 54(1)
  * If the review offer is accepted go to step 2
  * If the appeal is notified to the tribunal go to step 14

Late appeal

We may accept an appeal made late where there is a reasonable excuse.

8. Information about whether to accept late appeals can be found in ARTG2240. If, after following the guidance in ARTG the appeal cannot be accepted because it is late write to employer and
   
  * Explain that HMRC may accept appeals made late where there is a reasonable excuse, but that we do not agree that there is a reasonable excuse in this case. That if they wish they may contact the Tribunal and ask them to consider whether the appeal may be admitted
  * If no further information or no notification of an application from the Tribunal go to step 12
  * If the customer applies to the Tribunal go to step to step 14
9. Use Function AMEND EMPLOYER NOTES to
  * Record receipt / progress of the appeal and if the appeal is
  * Withdrawn go to step 10
  * Not withdrawn or the employer does not reply go to step 12

Withdrawal of appeal

10. If the appeal is withdrawn write to the employer and acknowledge the withdrawal of the appeal
   
11. Use Function AMEND EMPLOYER NOTES to record the date the appeal was withdrawn

Appeal not withdrawn

12. When you cannot settle an appeal by agreement you should write to the employer setting out your view of the matter and offering a review
   
13. Use Function AMEND EMPLOYER NOTES to record the date that a decision letter has been issued
  * Guidance for dealing with appeals, view of the matter, letters and reviews is in the Appeals Reviews and Tribunals Guidance (ARTG)

Tribunal determinations

| 14. | If the appeal is denied use Function AMEND EMPLOYER NOTES to | || |   | * Record date appeal denied | |   | * Reason(s) why the appeal was denied | | 15. | If the appeal is upheld follow the guidance at steps 2 and 3 and then | |   | * Write to the employer
 
And | |   | * Tell them that a new employer record has been opened which will be active from the following 6 April | |   | * Tell them the employer reference allocated to the new employer record
 
And remind the employer that | |   | * Forms P45 Part 1 are to be issued after 6 April for those employees moving to the new employer record | |   | * Forms P45 Part 3 are to be sent showing the new reference | | 16. | Use Function AMEND EMPLOYER NOTES to record the date the appeal was upheld by the Commissioners |