Employee personal liability for PAYE or NIC

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

Employee personal liability for PAYE or NIC

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
imgtext

Under the Taxes Management Act 1970, an individual is under a general legal obligation to inform HMRC of changes in their personal circumstances that may affect their tax status or the amount of tax that is due. The introduction of self assessment under Finance Act 1994 and Finance Act 1995 resulted in employees having to take responsibility for their PAYE affairs as well as their other financial circumstances which may give rise to an additional income tax liability (or claim for a refund) or capital gains tax, etc.

For employees, their tax situation is often straightforward and the correct amount of income tax is deducted via the PAYE system. However, there may be circumstances where too little tax has been deducted by the employer from the employee’s pay.

Establishing the obligation to pay personal tax due

If a tax underpayment arises, it may be necessary for HMRC to establish which party is responsible for this. As a starting point, it should be recognised that PAYE is not an exact process, rather it is intended

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 01 Jul 2025 12:40

Popular Articles

Allowable expenses for property businesses

Allowable expenses for property businessesGeneral itemsMany of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more

Short-term business visitors (STBVs)

Short-term business visitors (STBVs)What is a short-term business visitor?An STBV for UK tax purposes is an individual who performs duties for a non-UK employer and as a part of those duties has been asked to spend a short period working in the UK. There is a common misconception that there is

Read more Read more

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more Read more