What is a determination in relation to PAYE?

Produced by Tolley in association with

Employment Tax

Guidance

Introduction

Determinations can be issued against an employer for a failure to operate PAYE correctly, and the under-payment of tax and NIC by the employer to HMRC. Unlike other HMRC determinations, these determinations are not issued against the taxpayer, ie the employee, but against the employer who has failed to deduct the appropriate amount of tax and NIC from the employee’s earnings.

A determination is HMRC’s formal calculation of the amount of tax that is due. These are typically only used as a last resort by HMRC when informal requests for payment of the underpaid tax have been ignored. They should be treated as serious compliance failures by the employer.

HMRC’s guidance at PAYE 54000 onwards provides very practical guidance to officers and can be very useful to an adviser when considering the steps that HMRC has taken in raising a determination. The legislation governing these determinations can be found at SI 2003/2682, regs 72F, 80 and 110.

In this summary note, we will cover the following:

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what types of determination

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Ian Goodwin

Partner at Mazars , Employment Tax

Ian, a Chartered Tax Adviser, joined Mazars in 2017 after 12 years working at a Big 4 firm. He advises a wide range of organisations on reward, employment tax and employment status issues. More specifically, Ian has helped clients with the following: designing effective pay and reward structures, including salary sacrifice arrangements; managing compliance with the employment tax and national minimum wage regulations; implementing controls to govern employment status (including IR35 interaction); reviewing employee engagement and employee development, including how to utilise the Apprenticeship Levy; helping employers remain compliant, especially in relation to significant termination payments; providing support with gender pay gap and broader pay analysis; and navigating the complex legislation in place with regard to travel and expenses (permanent workplaces, company cars, staff entertaining).

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