These conditions are likely to be satisfied in most situations where the employer has inadvertently failed to pay the employee taxation providing the employer a right of recovery even where it has not obtained any express indemnity from the employee. This is in addition to the circumstances where the employer is expressly prohibited by the PAYE regulations from effecting the recovery by utilising the deduction mechanism (because, for example, there are insufficient earnings).
Is it fair?
At first instance, the Special Commissioner had some sympathy for Mr Chilcott's predicament noting that under s 144A:
These arguments were rejected by the High Court. It noted that employers always had a right to recover the PAYE in restitution. But what would happen if the employer chose not to enforce that right or agreed in advance not to do so? On the timing point, it held that the provisions were "doubtless intended to encourage employees not merely to reimburse their employers but to reimburse them promptly". But does this work? In situations where the parties are unaware of the liability until after expiry of the time limit, this 'encouragement' is ineffective.
These conditions are likely to be satisfied in most situations where the employer has inadvertently failed to pay the employee taxation providing the employer a right of recovery even where it has not obtained any express indemnity from the employee. This is in addition to the circumstances where the employer is expressly prohibited by the PAYE regulations from effecting the recovery by utilising the deduction mechanism (because, for example, there are insufficient earnings).
Is it fair?
At first instance, the Special Commissioner had some sympathy for Mr Chilcott's predicament noting that under s 144A:
These arguments were rejected by the High Court. It noted that employers always had a right to recover the PAYE in restitution. But what would happen if the employer chose not to enforce that right or agreed in advance not to do so? On the timing point, it held that the provisions were "doubtless intended to encourage employees not merely to reimburse their employers but to reimburse them promptly". But does this work? In situations where the parties are unaware of the liability until after expiry of the time limit, this 'encouragement' is ineffective.