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 leads the Mazars' Employment Tax practice in the UK.Experience:Ian helps employers attract and retain key personnel as well as ensure their governance is in the best shape to manage risks associated with Employment Tax and National Minimum Wage.He has supported many organisations in implementing salary sacrifice arrangements to increase net pay and make cost savings.Ian has advised businesses on IR35, expenses, benefits (including P11D and PSA compliance), Construction Industry Scheme and National Minimum Wage governance. This has included getting organisations ready for sale, as well as helping large employers mitigate HMRC risks.Ian has a keen interest in cost reduction and reward strategy, highlighted through supporting businesses with travel (cars, vans, temporary workplaces etc) and expenses, including NIC reclaim projects and bringing to life new reward strategies to better reflect the business objectives and culture.Work Highlights:Ian is a published author on Employment Tax, National Minimum Wage and Termination Payments, as well as contributing regular articles to various tax and other publications.He was heavily involved in helping organisations get to grips with their Covid response, supporting businesses with the CJRS/Furlough arrangements to help protect jobs and ensure claims made were as accurate as possible.

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