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HMRC internal manual

PAYE Manual

HM Revenue & Customs
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PAYE operation: international employments: employers who refuse to operate PAYE

Subjects needing special care

Occasionally an employer might refuse or object to operating PAYE.

The remainder of this subject gives some background to these cases and tells you how to deal with the employer.

Corresponding with reluctant employers

Unless the UK concern already has a PAYE scheme for other employees, it may not have a copy of the Employer’s Starter Pack or the CWG2 Further Guide to PAYE and NICs. Send a copy to a concern which does not have one.

Do not conduct correspondence about an employer’s liability to operate PAYE from the file of an employee. If no scheme exists, then in the early stages, use a dummy 46 file. A determination under Regulation 80 Income Tax (Pay As You Earn) Regulations 2003 is your final recourse to settle a dispute, but you must set up an employer record before you make a determination.

  • When writing to the employer, you must

    • Specify a reasonable date from which you expect them to start operating PAYE


    • Make it clear that you expect the specified emergency code to be used unless the employees complete coding claims

Once you have specified a date from which you expect PAYE to operate

  • Use EBS to set up an employer record if one does not already exist
  • Follow Action guide tax40003 to create employment records for the employees you hold information on

Seven weeks after the specified date check the BROCS payment screen in EBS to confirm that the employer is remitting tax for these employees

  • Payments should be made by 19th of the month following the end of the tax period. A tax period starts on the 6th of the month and ends on the 5th of the following month
  • Follow the instructions below on issuing Regulation 80 determinations if the employer is not making remittances

PAYE54000 onwards also gives guidance on Regulation 80 determinations.

Reluctant employers - making Regulation 80 determinations

You cannot make a Regulation 80 determination until you have formally told an employer that PAYE should operate. You should refer in your letter to the employer to the liable employees whose UK earnings have not had PAYE operated correctly.

How and when you issue Regulation 80 determinations depends on the circumstances and timing of the dispute with the reluctant employer.

You do not have to wait for a complete tax year to pass before taking action. If the employer is not making remittances on time you can issue Regulation 80 determinations based on monthly tax periods.

Regulation 80 tax paid before end of tax year

The employer may pay the Regulation 80 tax before the end of the tax year. If so, tell the Employers Section about the problem employer to help explain any apparent distortion on the forms P35 and P14 for the year of dispute.

When reviewing the liability of individual employees

  • Give credit for any tax paid on a Regulation 80 determination as well as any normal PAYE remittances made after settling the dispute


  • Do not repay any Regulation 80 tax credited that the employee has not paid back to the employer, or effectively suffered - for example, under a tax equalisation (PAYE81740) arrangement