The government announced in December 2004 that it would introduce rules permitting retrospective legislation to counter avoidance schemes. The ground was laid in due course as Finance Act 2006 s 92, for PAYE purposes, and the NIC legislation was empowered by the insertion of SSCBA 1992, s 4B with effect from 30 March 2006. Social Security (Contributions) (Amendment No 2) Regulations, SI 2007/1057 then created machinery for imposing and collecting retrospective contributions with effect from 6 April 2007.
If HMRC legislate retrospectively for a perceived avoidance scheme operated by an employer to be deemed to have been invalid (see E8.1110) a Class 1 liability will arise for those earnings periods ending after 6 April 2007 for which the scheme was in operation. In those circumstances, HMRC used to offer the following advice to employers1.
The employer must amend the pay record (form P11 or equivalent) for the earnings period(s) concerned or, if there is no such record, create
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