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G5: PAYE and NICs decisions
Form of PAYE r.80 decision
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"(1) This regulation applies if it appears to HMRC that there may be tax payable for a tax year under regulation 67G, as adjusted by regulation 67H(2) where appropriate, or 68 by an employer which has neither been—
(a) paid to HMRC, nor
(b) certified by HMRC under regulation 75A, 76, 77, 78 or 79.
(1A) In paragraph (1), the reference to tax payable for a tax year under regulation 67G includes references to—
(a) any amount the employer was liable to deduct from employees during the tax year, and
(b) any amount the employer must account for under regulation 62(5) (notional payments) in respect of notional payments made by the employer during the tax year,
whether or not those amounts were included in any return under regulation 67B (real time returns of information about relevant payments) or 67D (exceptions to regulation 67B).
(2) HMRC may determine the amount of that tax to the best of their judgment, and serve notice of their determination on the employer.
(3) A determination under this regulation must not include tax in respect of which a direction under regulation 72(5) has been made; and directions under that regulation do not apply to tax determined under this regulation.
[(3A) A determination under this regulation must not include tax in respect of which a direction under regulation 72F has been made.
(4) A determination under this regulation may—
(a) cover any one or more tax periods in a tax year, and
(b) extend to the whole of the amount of tax determined by HMRC under paragraph (2), or to such part of it as is payable in respect of—
(i) a class or classes of employees specified in the notice of determination (without naming the individual employees), or
(ii) one or more named employees specified in the notice.
(5) A determination under this regulation is subject to Parts 4, 5, 5A and 6 of TMA (assessment, appeals, collection and recovery) as if—
(a) the determination were an assessment, and
(b) the amount of tax determined were income tax charged on the employer,
and those Parts of that Act apply accordingly with any necessary modifications." (SI 2003/2682 r.80)
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- Decision that PAYE is due and determination of the amount
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"[103] Regulation 80 does not specify that the determination must be in any particular form. It cannot be made if a certificate has been issued under Regulation 78, but we have found that no such certificate was issued. Regulation 80(2) provides that “The Inland Revenue may determine the amount of that tax [unpaid PAYE] to the best of their judgement, and serve notice of their determination on the employer”.
[104] In our view, it is sufficient if HMRC have decided how much PAYE income tax they consider to be due and unpaid and have told the employer of that decision. It is clear from the documents referred to in Mr Loftus’ submissions that HMRC had decided there was unpaid tax, they had determined that amount of that tax and had notified the Appellant of that decision.
[105] Accordingly, we find that HMRC had made a Regulation 80 determination which provides the Appellant with an appealable decision." (Prisma Recruitment Limited v. HMRC [2023] UKFTT 291 (TC), Judge McKeever)
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NICs decisions (s.8 decisions)
"(1) Subject to the provisions of this Part, it shall be for an officer of the Board—
(a) to decide whether for the purposes of Parts I to V of the Social Security Contributions and Benefits Act 1992 a person is or was an earner and, if so, the category of earners in which he is or was to be included,
(b) to decide whether a person is or was employed in employed earner’s employment for the purposes of Part V of the Social Security Contributions and Benefits Act 1992 (industrial injuries),
(c) to decide whether a person is or was liable to pay contributions of any particular class and, if so, the amount that he is or was liable to pay,
(d) to decide whether a person is or was entitled to pay contributions of any particular class that he is or was not liable to pay and, if so, the amount that he is or was entitled to pay,
(e) to decide whether contributions of a particular class have been paid in respect of any period,
(ea) to decide whether a person is or was entitled to make a deduction under section 4 of the National Insurance Contributions Act 2014 (deductions etc of employment allowance) and, if so, the amount the person is or was entitled to deduct,
(eb) to decide whether a person is or was entitled to a repayment under that section and, if so, the amount of the repayment,
(f) subject to and in accordance with regulations made for the purposes of this paragraph by the Secretary of State with the concurrence of the Board, to decide any issue arising as to, or in connection with, entitlement to statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay or statutory parental bereavement pay,
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(h)to decide any question as to the issue and content of a notice under subsection (2) of section 121C of the M2Social Security Administration Act 1992 (liability of directors etc. for company’s contributions),..." (SSC(ToF)A 1999, s.8(1))
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NICs decisions must be to best of information and belief
“(1) A decision which, by virtue of section 8 of the Transfer Act, falls to be made by an officer of the Board under or in connection with the Social Security Contributions and Benefits Act 1992 ... —
(a) must be made to the best of his information and belief, and
(b) must state the name of every person in respect of whom it is made and--
(i) the date from which it has effect, or
(ii) the period for which it has effect.” (SCAR r.3)
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Best judgment distinguished
“The first point to note is that it is not "best judgment" which is in play here, but the "best of information and belief". This seems to us to impose a lesser burden on HMRC.” (Couldwell Concrete Flooring Ltd v. HMRC [2016] UKFTT 776 (TC), §144, Judge Thomas).
Not required to be split by period if the split is apparent
“We have to say we were rather surprised that the notice did not split the liability by tax year as the calculations had, but that is not a requirement of the SSCDAR and so long as the split is apparent from the calculations (as it is) there is no legal ground for complaint.” (Couldwell Concrete Flooring Ltd v. HMRC [2016] UKFTT 776 (TC), §152, Judge Thomas).
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No provision saving NICs decision for want of form
“We do note there is nothing in SSCBA, SETA or any regulations that says anything like, or attracts, section 114 Taxes Management Act 1970 (want of form not invalidate assessment). It could be argued that, without such a provision, want of form may invalidate a decision. The income tax cases seem to stress that want of form is only a grave matter if the period is wrong. This is an issue in relation to Abigail, but only in that the period stated extends beyond the period for which contributions are payable in respect of Abigail's benefits. That could have misled a less aware person than Dr Milton, but we do not think it is serious enough to warrant invalidating the decision. The amounts wrongly determined in relation to Abigail are correctly to be charged in respect of Sean and Phillippa so that the overall amount is correct.” (Couldwell Concrete Flooring Ltd v. HMRC [2016] UKFTT 776 (TC), §152, Judge Thomas).
Notice required to be given
“(1) Notice of a decision by an officer of the Board referred to in regulation 3(1) must be given--
(b) to every person named in the decision.
(2) A notice under this regulation must state the date on which it is issued and may be served by post addressed to any person to whom it is to be given at his usual or last known place of residence, or his place of business or employment.
(3) Where notice is to be given to a company, it may be served by post addressed to its registered office or its principal place of business." (SCAR r.4).
Varying NICs decision
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“(1) An officer of the Board may vary a decision under section 8 of the Transfer Act ... if he has reason to believe that it was incorrect at the time that it was made.
(2) Notice of a variation of a decision must be given to the same persons and in the same manner as notice of the decision was given.
(3) A variation of a decision may state that it has effect for any period in respect of which the decision could have had effect, if the reason for the variation had been known to the person making the decision at the time that it was made.
(4) A decision which is under appeal may be varied at any time before the tribunal determines the appeal." (SCAR r.5).
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Not to be varied where FTT decision pending
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“In this case a decision is under appeal. It was incorrect at the time it was made and Mr Burke at least now has reason to believe that it was incorrect at the time it was made in that it (a) stated the wrong period and (b) stated the wrong amount. It would in our view be wholly inappropriate for Mr Burke or Mr Lawrence to vary the decision before HMRC receive our decision on the appeal, as until they receive it they do not know what the correct periods and amounts are - and we do not know what would or should happen if HMRC were to vary the decision in a particular amount and period and that turned out to be different from that which we determine.” (Couldwell Concrete Flooring Ltd v. HMRC [2016] UKFTT 776 (TC), §114, Judge Thomas).
Appeals against NICs decisions​
“(1)This section applies to any decision of an officer of the Board under section 8 of this Act or under regulations made by virtue of section 10(1)(b) or (c) of this Act (whether as originally made or as varied under regulations made by virtue of section 10(1)(a) of this Act).
(2)In the case of a decision to which this section applies—
(a)if it relates to a person’s entitlement to statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay or statutory parental bereavement pay], the employee and employer concerned shall each have a right to appeal to the tribunal, and
(b)in any other case, the person in respect of whom the decision is made and such other person as may be prescribed shall have a right to appeal to the tribunal.
(3)In subsection (2)(b) above “prescribed” means prescribed by the Board by regulations.
(4)This section has effect subject to section 121D of the M1Social Security Administration Act 1992 (appeals in relation to personal liability notices)." (SSC(ToF)A 1999, s.11)
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No time limit on NICs decisions
"There is no statutory time limit for making a National Insurance contributions (NIC) or employment status decision.
Where a case involves unpaid NIC and payment for some or all of those NIC cannot be enforced, for example, because, the Limitation Act 1980 (the Act) (applies to England and Wales) or the Limitation (Northern Ireland) Order 1989 (SI 1989 No 1339) (the Order) (applies to Northern Ireland) bars us from recovering them, the NIC are still due, so you can include such arrears in decisions if required. Any accompanying letter should make it clear that HMRC will not take any action to enforce payment of NIC for the periods that are barred for recovery by the Act or the Order." (DANSP14100)
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Limitation period for enforcement (6 years)
"(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.
(2) Subsection (1) above shall not affect any action to which section 10 or 10A of this Act applies." (Limitation Act 1980, s.9)
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Final s.8 decision conclusive proof of liability
"(1) This section applies to proceedings before a court—
[...]
(b) involving any question as to the payment of contributions (other than a Class 4 contribution recoverable in accordance with section 15 of the Contributions and Benefits Act); or
(c)for the recovery of any sums due to the Inland Revenue or the National Insurance Fund.
(2) A decision of an officer of the Inland Revenue which—
(a) falls within section 8(1) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999; and
(b) relates to or affects an issue arising in the proceedings,
shall be conclusive for the purposes of the proceedings.
(3) If—
(a) any such decision is necessary for the determination of the proceedings, and
(b) the decision of an officer of the Inland Revenue has not been obtained under section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999, the decision shall be referred to such an officer to be made in accordance (subject to any necessary modifications) with Part II of the Social Security Contributions (Transfer of Functions, etc.) Act 1999." (SSAA 1992, s117A)
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Appeal period not complete
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(4) Subsection (2) above does not apply where, in relation to the decision—
(a) an appeal has been brought but not determined;
(b) an appeal has not been brought (or, as the case may be, an application for leave to appeal has not been made) but the time for doing so has not yet expired; or
(c) an application for variation of the decision has been made under regulations made under section 10 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999.
(5) In a case falling within subsection (4) above the court shall adjourn the proceedings until such time as the final decision is known; and that decision shall be conclusive for the purposes of the proceedings." (SSAA 1992, s117A)
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