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13A.4.3    Liabilities under PAYE

13A.4.3.1    The Employer

The employer is liable to deduct PAYE in accordance with tables supplied by the Revenue and taking account of the PAYE coding of the employee, which is based on the individual reliefs for the year.¹⁷⁹ If the employer fails to deduct, the Revenue may demand the money from the employer.¹⁸⁰ If the Revenue proceeds against the employer, it was at one time held that the employer could not, in turn, recover from the employee.¹⁸¹ This was because the employee was not a trustee for the employer and because the action for money had and received would not lie; the employer could only retain the sums from later payments to the employee,¹⁸² which would be of no value if the employment had ceased. Today, the principle of restitution, which has superseded the old action for money had and received, may allow the employer to recover the payment from the employee if the employee has been unjustly enriched. However, the old rule depends not only on the scope of the action for money had and received but also on the construction of the appropriate legislation.

13A.4.3.2    The Employee

If there has been an under-deduction of tax by the employer the Revenue may recover the tax from the employee in two very different situations. First, the collectors may recover from the employee and not from the employer if they are satisfied that the employer took reasonable care to comply with the regulations and that the failure was due to an error made in good faith.¹⁸³ Secondly, the Board (not the collectors) may recover from the employee where it is of the opinion that the employee received the sum knowing that the employer had wilfully failed to deduct the tax.¹⁸⁴ The same applies to sums which have been assessed on the e