The Social Security (Contributions) Regulations 2001

Inspection of employer’s records U.K.

26.—(1) Every employer, whenever requested to do so by an officer authorised by the [F1 Inland Revenue], shall produce to that officer for inspection, at such time as the officer may reasonably require, at the specified place—

(a) all wages sheets, deductions working sheets, and other documents and records of any kind or description relating to the calculation of payment of the [F2 general earnings] of his employees in respect of the years or F3 ... tax periods specified by the officer or to the amount of the earnings-related contributions payable in respect of those [F2 general earnings];

(b) all wages sheets, deductions working sheets, and other documents and records of any kind or description relating to the amount of any Class 1A contributions or Class 1B contributions payable by the employer in respect of the years specified by the officer; or

(c) such of those wage sheets, deductions working sheets, or other documents and records as may be specified by the officer.

(2) In sub-paragraph (1) “the specified place” means—

(a) such place in Great Britain, or, in the case of a request made in Northern Ireland, in Northern Ireland, as the employer and the officer may agree upon;

(b) in default of such agreement, the place in Great Britain, or, in the case of a request made in Northern Ireland, in Northern Ireland, at which the documents and records referred to in sub-paragraph (1)(a) or (b) are normally kept; or

(c) in default of such agreement and if there is no such place as is referred to in paragraph (b), the employer’s principal place of business in Great Britain, or, in the case of a request made in Northern Ireland, in Northern Ireland.

(3) The officer may—

(a) take copies of, or make extracts from, any documents produced to him for inspection in accordance with sub-paragraph (1); and

(b) if it appears to him to be necessary to do so, at a reasonable time and for a reasonable period, remove any documents so produced, and, if he does so, shall provide a receipt for any documents so removed; and where a lien is claimed on a document produced in accordance with sub-paragraph (1), the removal of the document under this sub-paragraph shall not be regarded as breaking the lien;

and where a document removed in accordance with paragraph (b) is reasonably required for the proper conduct of a business the authorised officer shall, within seven days, provide a copy of the document, free of charge, to the person who produced it or caused it to be produced.

[F4 (3A) Where records are maintained by computer, the employer shall provide the officer with all facilities necessary for obtaining information from them.]

(4) [F5 The authorised officer may], on the occasion of each inspection, prepare a certificate, by reference to the information obtained from an inspection of the documents and records produced under sub-paragraph (1), showing—

(a) the amount of earnings-related contributions which it appears from the documents and records so produced that the employer is liable to pay to the [F6 Inland Revenue], excluding any amount deducted by the employer by virtue of the Compensation of Employers Regulations for the years or F3 ... tax periods covered by the inspection; or

(b) the amount of any Class 1B contributions which it appears from the documents and records so produced that the employer is liable to pay to the [F6 Inland Revenue] for the years covered by the inspection, or such an amount in addition to an amount referred to in paragraph (a);

together with any amount of earnings-related contributions or Class 1B contributions or a combination of those classes of contributions, which has not been paid to him or, to the best of his knowledge and belief, to any other person to whom it might lawfully be paid.

(5) The production of a certificate mentioned in sub-paragraph (4) shall, unless the contrary is proved, be sufficient evidence that the employer is liable to pay to the [F6 Inland Revenue] in respect of the years or, as the case may be, F3 ... tax periods mentioned in the certificate, the amount shown in the certificate as unpaid; and any document purporting to be such a certificate shall be treated as such a certificate until the contrary is proved.

The provisions of paragraph 16 shall apply with any necessary modifications to the amount shown in such a certificate.

(6) For the purposes of sub-paragraph (1), the wages sheets, deductions working sheets (other than deductions working sheets issued under [F7 regulation 35 of the PAYE regulations]) and other documents and records mentioned in that sub-paragraph shall be retained by the employer for not less than three years after the end of the year to which they relate; and, in the case of any of those documents or records which contains any information relating to the amount of any Class 1A contribution or Class 1B contribution, for not less than three years after the end of the year in which that contribution became payable.

(7) Where an election has been made jointly by the secondary contributor and the employed earner for the purposes of paragraph 3B(1) of Schedule 1 to the Act, sub-paragraphs (1) to (3) shall apply to the records which the secondary contributor is obliged by paragraph 8 to maintain and, for the purposes of paragraph 3B of Schedule 1 to the Act, those records shall be retained by him throughout the period for which the election is in force and for six years after the end of that period.

(8) For the purposes of this paragraph , “employer”—

(a) includes, in relation to a Class 1A contribution, the person liable to pay such a contribution in accordance with section 10ZA of the Act (liability of third party provider of benefits in kind) F8 ; and

(b) means, in relation to a Class 1B contribution, the person liable to pay such a contribution in accordance with section 10A of the Act F9 .

Textual Amendments

F1 Words in Sch. 4 para. 26(1) substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(d)

F2 Words in Sch. 4 para. 26 substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(a)

F3 Word in Sch. 4 para. 26 omitted (6.4.2004) by virtue of The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(b)

F4 Sch. 4 para. 26(3A) inserted (with effect in accordance with reg. 1(1) of the amending S.I.) by The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(6)

F5 Words in Sch. 4 para. 26(4) substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(e)

F6 Words in Sch. 4 para. 26 substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(c)

F7 Words in Sch. 4 para. 26(6) substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(16)(f)

F8 Section 10ZA was inserted, as respects Great Britain by section 75 of the Child Support, Pensions and Social Security Act 2000.

F9 See regulation 35(4) of S.I. 2000/2207.