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

Reconcile individual: posting EOY information to individual records: PAYE Errors Unit (PEU)

If an employer asks for a direction under Regulation 72(5) Condition A because they have under deducted PAYE tax in error, the papers and a summary of the facts should be referred to the PAYE Errors Unit (PEU) after following action guide tax40107. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The PEU will consider the employer’s request for a direction, based on the explanation given by the employer in regard to the error and will

  • Issue a Refusal Notice if the explanation is not satisfactory that reasonable care to operate PAYE was made and that the error was made in good faith

If the Refusal Notice is not appealed within 30 days or is subsequently upheld by review or the relevant Tribunal, the PEU will

  • Notify the decision to the submitting office

The employer should be pursued for any PAYE tax by the submitting office if the tax remains unpaid. This may involve separate action to raise a Regulation 80 Determination where the employer refuses to voluntarily pay the tax in the Refusal notice.

If the PEU accept the employer’s explanation satisfies both parts of Condition A they will relieve the employer of the obligation to pay the tax and

  • Issue a Direction Notice to the employee and to the employer

The PEU will hold the Direction Notice for 30 days in case an appeal is received. If the Direction Notice is not appealed or is upheld by internal review or at the Tribunal hearing, the PEU will

  • Notify the decision to the submitting office
  • Confirm that the employee should pay the PAYE tax as an underpayment

The submitting office will agree with the employee how the tax will be paid. If the employee objects to payment, then the submitting office should consider formal action to recover the tax. This could include issuing returns for completion under Self Assessment.

Appeals

If an appeal is received, the PEU Decision maker, higher officer will either

  • Reconsider the original decision made and try to settle the appeal

Or

  • Send a letter, explaining HMRC view of the matter, offering a review and informing them that if they wish to take matters further they should notify the Tribunal of the appeal (see ARTG4220)