Regulation 80 determinations for unpaid PAYE

A regulation 80 determination is HMRC’s formal decision, to the best of its judgement, of PAYE tax an employer owes but has not paid. It is treated like an assessment on the employer, so the normal time limits of 4, 6 or 20 years apply, the employer has 30 days to appeal in writing, and the tax is due 30 days from the date of the determination, with late payment penalties if it is not paid.

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When does HMRC make a regulation 80 determination?

Regulation 80(1) of the Income Tax (Pay As You Earn) Regulations 2003 applies where it appears to HMRC that there may be PAYE payable by an employer for a tax year that has been neither paid nor certified by HMRC. Regulation 80(1A) makes clear this includes tax the employer was liable to deduct and tax it must account for on notional payments, whether or not those amounts were included in its real time returns.

HMRC’s PAYE Manual at PAYE54001 says determinations are often used to collect tax on directors’ pay but can be used for any employees where PAYE was not operated correctly. EIM71430 adds that a determination is also the vehicle for taking disputes to the tribunal, such as whether workers are employed or self employed, or whether payments are earnings. That is why status reviews and employer compliance checks often end with one.

How does HMRC work out the amount?

Regulation 80(2) lets HMRC determine the tax to the best of its judgement and serve notice on the employer. A determination is made as a figure of tax, not income (PAYE54001). PAYE54045 explains that HMRC can estimate both the payments and the tax where records are missing, and under regulation 80(4) a determination can cover one or more tax periods and either named employees or a described class, such as lorry drivers in respect of bonus payments.

PAYE54155 sets out who has to prove what. HMRC must show the officer believed tax may be payable and unpaid. The employer then has to show the determination is wrong. For determinations outside the normal time limit, HMRC must show the tax was carelessly or deliberately understated.

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What tax cannot be included?

Regulation 80(3) says a determination must not include tax covered by a regulation 72 direction, which moves under deducted tax to the employee, and directions cannot then be made for tax already determined. Regulation 80(3A) excludes tax covered by a regulation 72F direction. PAYE54010 lists these and other directions. The practical point is that an employer who wants to argue it took reasonable care should request a direction before a determination is issued.

What time limits apply?

Regulation 80(5) applies Parts 4, 5, 5A and 6 of the Taxes Management Act 1970 as if the determination were an assessment and the tax were income tax charged on the employer. PAYE54015 confirms the assessment time limits therefore apply:

Situation	Latest time to determine	Authority
Ordinary case	4 years after the end of the tax year	Section 34 TMA
Loss of tax brought about carelessly	6 years after the end of the tax year	Section 36(1) TMA
Loss of tax brought about deliberately, and certain other failures	20 years after the end of the tax year	Section 36(1A) TMA

Section 36(1B) treats a loss brought about by someone acting on the employer’s behalf, such as a payroll bureau, as brought about by the employer. PAYE54015 also refers to section 36A for certain offshore cases and says officers need an authorising officer’s approval before going beyond the ordinary limit. Where a failure spans several years, PAYE54060 and PAYE54065 tell officers to consider whether recovering all past tax is necessary and allow, in worthy cases, a test case determination for one recent period with PAYE applied going forward.

How do you appeal against a determination?

PAYE54130 confirms the time limit is 30 days. Section 31A TMA requires the notice of appeal to be in writing, within 30 days after the date the notice was issued, to the officer who issued it. After appealing, the employer can continue discussions, accept or ask for an HMRC review, or notify the appeal to the tribunal. If the tribunal confirms the determination, the employer pays and the employee gets credit for the PAYE. If the appeal succeeds, HMRC discharges the determination and may look to the employee under Self Assessment instead.

Postponing the tax

An appeal does not stop the tax being payable. Section 55 TMA lets the appellant apply in writing to HMRC within 30 days to postpone the amount it believes is overcharged, stating the amount and the grounds, with a referral to the tribunal if HMRC does not agree.

Equitable reduction

Before the determination is final, PAYE54145 allows HMRC to accept a lower figure, for example the tax the employees would have owed on personal assessment, if that assessment is complete. HMRC will never agree this where the employer deducted the tax and kept it. Once a determination is final, PAYE54205 says it cannot be reduced unless a late appeal is accepted, and PAYE54210 treats any later request to pay less as a late appeal.

When is the tax due and what if it is not paid?

HMRC’s Compliance Handbook at CH152300 says the amount in a determination is due 30 days from the date of the determination. The penalty date is 31 days after the later of that due date and the date the determination was made. The penalty is 5% of the amount unpaid at the penalty date, with further 5% penalties on amounts still unpaid 5 months and 11 months after it. PAYE54265 explains that interest is charged under section 101 of the Finance Act 2009 for 2014 to 2015 onwards, running from the 19th or 22nd of the month following each tax period. Penalties for inaccurate returns are considered separately; see PAYE late filing and payment penalties.

If the tax is still unpaid 30 days after the determination becomes final and conclusive, regulation 81 lets HMRC direct that it is recovered from an employee who received pay knowing the employer wilfully failed to deduct tax, or where the tax relates to a notional payment, which links to the section 222 rules.

What about National Insurance?

Regulation 80 only recovers tax. PAYE54295 says National Insurance disputes need a separate decision under section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999, which HMRC usually issues alongside the determination. CH152300 notes there is no statutory due date for a section 8 decision, but HMRC normally treats it as due 30 days after issue for consistency.

How does this work in practice?

HMRC’s own example at CH152300: George and Williams Ltd failed to operate PAYE and National Insurance on payments to part time staff. Determinations and section 8 decisions totalling £30,650 PAYE and £20,590 National Insurance were issued on 1 October 2013. The due date was 31 October 2013 and the penalty date 1 December 2013. The company paid in full on 15 December 2013, so the late payment penalty was 5% of £51,240, which is £2,562, with no further penalties because it paid within 5 months of the penalty date.

What mistakes do employers make?

Ignoring an estimated determination. Without an appeal within 30 days it becomes final at HMRC’s figure.
Appealing but not applying to postpone, then facing penalties on tax that was due all along.
Leaving a regulation 72 request until after the determination.
Confusing it with a Self Assessment determination, which cannot be appealed; see HMRC determinations when no return is filed.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.