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The Income Tax (Pay As You Earn) Regulations 2003

Type Statutory-Instrument

Publication 2003-10-21

Last updated 2026-04-06

State In force

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(a) the grounds for the refusal, and

(b) the date on which the refusal notice was issued.

(4) The employer may appeal against the refusal notice—

(a) by notice to the Inland Revenue,

(b) within 30 days of the issue of the refusal notice,

(5) For the purpose of paragraph (4) the grounds of appeal are that—

(a) the employer did take reasonable care to comply with these Regulations, and

(b) the failure to deduct the excess was due to an error made in good faith.

(6) If on appeal under paragraph (4) that is notified to the tribunal it appears to the tribunal that the refusal notice should not have been issued the tribunal may direct that the Inland Revenue make a direction under regulation 72(5) in an amount the tribunal determines is the excess for one or more tax periods falling within the relevant tax year.

Employee’s appeal against a direction notice where condition A is met

72B

(1) An employee may appeal against a direction notice under regulation 72(5A)(a)—

(a) by notice to the Inland Revenue,

(b) within 30 days of the issue of the direction notice,

(2) For the purpose of paragraph (1) the grounds of appeal are that—

(a) the employer did not act in good faith,

(b) the employer did not take reasonable care, or

(3) On an appeal under paragraph (1) that is notified to the tribunal, the tribunal may—

(a) if it appears ... that the direction notice should not have been made, set aside the direction notice; or

(b) if it appears ... that the excess specified in the direction notice is incorrect, increase or reduce the excess specified in the notice accordingly.

Employee’s appeal against a direction notice where condition A is met

72C

(1) An employee may appeal against a direction notice under regulation 72(5A)(b)—

(a) by notice to the Inland Revenue,

(b) within 30 days of the issue of the direction notice,

(2) For the purpose of paragraph (1) the grounds of appeal are that—

(a) the employee did not receive the payments knowing that the employer wilfully failed to deduct the amount of tax which should have been deducted from those payments, or

(b) the excess is incorrect.

(3) On an appeal under paragraph (1) that is notified to the tribunal, the tribunal may—

(a) if it appears ... that the direction notice should not have been made, set aside the direction notice; or

(b) if it appears ... that the excess specified in the direction notice is incorrect, increase or reduce the excess specified in the notice accordingly.

Appeals: supplementary provisions

72D

(1) This regulation applies to appeals under regulations 72A(4), 72B, 72C, 72G and 81A.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) This paragraph applies if in respect of the same error by an employer in relation to condition A in regulation 72(3)—

(a) more than one employee is appealing under regulation 72B; or

(b) there is an appeal by an employer under regulation 72A(4) and by an employee under regulation 72B

...

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) Where paragraph (4) applies or the appeal is material to the liability to tax of the employer and the employee, all the persons concerned are entitled to be parties to the appeal.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employee’s appeal against direction notice

81A

(1) An employee may appeal against a direction notice under regulation 81(4A)—

(a) by notice to the Inland Revenue,

(b) within 30 days of the issue of the direction notice,

(2) For the purpose of paragraph (1) the grounds of appeal are that—

(a) in relation to condition A in regulation 81, the employee did not receive the payments knowing that the employer wilfully failed to deduct the amount of tax which should have been deducted from those payments,

(b) in relation to condition B in regulation 81, the relevant payment was not a notional payment, or

(3) On an appeal under paragraph (1) that is notified to the tribunal, the tribunal may—

(a) if it appears ... that the direction notice should not have been made, set aside the notice; or

(b) if it appears ... that the amount of tax specified in the direction notice is incorrect, increase or reduce the amount specified in the notice accordingly.

(4) Regulation 72D applies to appeals under this regulation.

Procedure in Form P46 Cases: Statement A applies

Procedure in Form P46 Cases: Statement B applies

Procedure in Form P46 Cases: Statement C applies or Form P46 not signed when required

Interpretation of Chapter 2A

133A

(1) In this Chapter—

“the Act” means the Finance (No.2) Act 2005 and a reference (without more) to a numbered provision is a reference to the provision of the Act bearing that number;

“the Department” means—in Great Britain, the Department for Work and Pensions; andin Northern Ireland, the Department for Social Development;

“lump sum” means a social security pension lump sum as defined in section 9 of the Act;

“the recipient” means a person who has become entitled to a lump sum.

Application of other Parts

133B

(1) Parts 2 (codes) and 3 (deduction and repayment of tax) do not apply to lump sums.

(2) The rest of these Regulations apply as if Her Majesty’s Revenue and Customs had issued a code in respect of a social security pension lump sum at either—

(a) the rate notified to the Department by the recipient pursuant to regulation 133D, or

(b) 20%, if the recipient has not notified the Department of a rate.

Determination of Rate of Deduction

133C

(1) On making any payment of a lump sum to a recipient during a tax year, the Department must deduct income tax at the ... rate calculated in accordance with sub-paragraph (2).

(2) For the purposes of this chapter the ... rate is either—

(a) the rate notified to the Department by the recipient in accordance with regulation 133D, or

(b) in default of any such notification, 20%.

Notification by Recipient of Notice of Tax Rate

133D

(1) The recipient shall notify the Department that he considers the nil tax code should be applied to the lump sum or that one of the following rates should be used—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) 20%, or

in accordance with section 7(5) of the Act.

(2) Notification shall be in the form, and made within the period, specified by the Department.

Certificate of tax deducted

133E

(1) On making any payment of a lump sum from which tax is deducted, the Department may and if the recipient so requires, must, give the recipient an award notification showing the following particulars.

(2) The particulars are—

(a) the recipient’s name,

(b) the recipient’s national insurance number, if known,

(d) the amount of the payment, and

(e) the amount of tax deducted.

Repayment to recipient during tax year

133F

The Department may repay tax deducted from a lump sum to a recipient at any time during the tax year in which it was paid, if it appears to the Department that the incorrect rate of income tax was applied to the payment due to an administrative error by the Department.

Records and notices

133G

(1) The Department must record, in a deductions working sheet, the following particulars about any payment of a lump sum.

(2) The particulars are—

(a) the recipient’s name,

(b) the recipient’s national insurance number, if known,

(d) the amount of tax (if any) deducted from the payment,

(e) the tax rate (if any) notified by the recipient to the Department, and

(f) the amount of any repayment made to the recipient in respect of the lump sum.

(3) The Department shall notify an officer of Revenue and Customs when a lump sum payment is made.

(4) The notification referred to in sub-paragraph (3) shall contain the following information—

(a) the recipient’s name and address,

(b) the recipient’s national insurance number, if known,

(d) the recipient’s date of birth.

(5) The Department shall administer a separate PAYE scheme for the lump sum payments.

Other PAYE income of recipient

133H

Nothing in this Chapter affects the application of these Regulations to any other PAYE income of a recipient.

Income subject to retrospective tax provision — information to employee

36A

(1) This regulation applies if—

(a) a payment is made to an employee;

(b) the employment in connection with which it was paid ceases;

(d) the tax year in which the payment was actually made is not closed, and

(e) the amount of the qualifying payment was not included in Form P45.

(2) If this regulation applies the person who made the payment must provide to the employee, without unreasonable delay after the relevant time, details of—

(a) the date on which the qualifying payment was actually made;

(b) the amount of the qualifying payment; and

PAYE income paid after employment ceased

Income paid after cessation of employment subsequently becoming subject to PAYE

37A

(1) This regulation applies if—

(a) a payment has been made, after the cessation of the employment, to a former employee—

(i) by the former employer, or

(ii) by any other person in respect of an obligation of the former employer;

(b) that payment becomes a qualifying payment after the employment ceased; and

(2) Where a qualifying payment has been made in a closed year, the employer must deduct tax, from any other payment made to the former employee in the tax period at the relevant time—

(a) in accordance with the last code used for the tax year in which the qualifying payment was made, or

(b) if the employer has not been notified of a code for that tax year, at the additional rate of tax applicable for that year.

(3) Where a qualifying payment has been made in an open year, the employer must deduct tax from any other payment made to the former employee—

(a) in accordance with the code in force in the final tax period in which the employee was employed, or

(b) if the employer has not been notified of a code, at the additional rate of tax applicable for that year.

(4) Neither the making of the qualifying payment, nor its subsequently becoming taxable, affect the cessation of the employment, and the provisions listed in regulation 37(4) do not apply in relation that payment.

(5) The employer must record the following information in a deductions working sheet for the tax year in which that payment was made.

Death of employee

Death of pensioner

Procedure in cases of retrospective earnings: code treated as issued by HMRC

50A

(1) If—

(a) as a result of a retrospective tax provision, a qualifying payment was made in a year (whether open or closed) to a person, and

(b) a code has never been issued to the employer in respect of employment with whom that qualifying payment was made,

paragraph (2) applies.

(2) Where this paragraph applies the higher rate code applicable to the year in which the qualifying payment was made is treated, for the purposes of Parts 2 to 4 (codes, deduction and repayment of tax, payments, information and returns) as having been issued by HMRC as the code for use in respect of the employee in relation to that year.

(3) Paragraph (2) does not apply for the purposes of regulation 18 (objections and appeals) and regulations 46 to 49E and 51 to 53 (Form P46 procedure and late presentation of Form P45).

Late presentation of Form P45

Late presentation of Form P45: employer’s duties

Form P46 cases: subsequent procedure on issue of employee’s code

Deduction working sheets: retrospective employment income in closed tax year

66A

(1) Paragraph (2) applies if—

(a) a code has been issued to an employer in respect of an employee for a tax year which has subsequently become a closed tax year (“the relevant tax year”); and

(b) after the end of that tax year a payment made during it to that employee becomes a qualifying payment.

(2) The employer must at the relevant time —

(a) in a case where there was a deductions working sheet for the employee for the relevant tax year, revise it to reflect the effect of the retrospective tax provision on the total PAYE income including the retrospective employment income for that year; and

(b) in a case where there was no deductions working sheet for the employee for the relevant year, produce one showing that effect on that income for that year.

(3) In a case falling within paragraph (2)(b) the employer must record in the deductions working sheet—

(a) the employee’s name,

(b) the employee’s national insurance number, if known,

(d) details of the relevant tax year.

(4) The employer must record in the deductions working sheet in respect of every qualifying payment—

(a) the date on which the payment is made,

(b) the amount of the payment, and

(5) Despite paragraph (4)(a), in completing the deductions working sheet, the amount of any retrospective employment income shall be treated, for the purpose of computing the amount of tax to be deducted, as if it were paid in the final tax period, in which the employee was employed, in the relevant tax year.

Information to employees about payments and tax deducted (Form P60)

Revised information to employees about payments and tax deducted (Form P 60)

67A

(1) This regulation applies where—

(a) an enactment containing a retrospective tax provision applicable to a closed tax year is passed; and

(b) in consequence of the passing of that enactment an employee’s employment income in that closed tax year is increased.

(2) Before 1st January next following the passing of the enactment—

(a) if the employer has previously given the employee a certificate (Form P60), the employer must give the employee a revised certificate (Form P60); and

(b) if the employer has not previously given the employee such a certificate, the employer must give the employee a copy of the revised form P14 completed in accordance with regulation 73A (amended return of relevant payments (Forms P14 and P35(RL)) .

(3) Paragraphs (2) and (3) of regulation 67 apply, in a case falling within paragraph (2)(a), for the purposes of this regulation as they apply for the purposes of that regulation, save that—

(a) sub-paragraph (f) of paragraph (2) shall have effect as if for “the total amount” there were substituted “the revised total amount”; and

(b) sub-paragraph (g) of that paragraph shall have effect as if for “total net tax” there were substituted “the revised total amount of net tax”;

with references to revised amounts being construed as references to the amounts of relevant payments and net tax deducted computed after the application of the retrospective tax provision.

(4) Where a revised certificate is given under this regulation—

(a) the employer must endorse it to show that it supersedes an earlier certificate; and

(b) the employee must not use the certificate which it supersedes.

Amended returns of relevant payments and tax (Forms P14 and P35(RL))

73A

(1) This regulation applies where, as a result of a retrospective tax provision, the total amount of the relevant payments made by an employer to employees increases for any closed tax year.

(2) Where this regulation applies, before 20th May following the end of the tax year in which the enactment containing the retrospective tax provision is passed, the employer must deliver to HMRC a return containing the following information.

(3) The information is—

(a) the tax year to which the return relates,

(b) the revised total amounts of the relevant payments made, or treated as made, during the tax year to all employees in respect of whom the employer was required, or has subsequently become required, to prepare or maintain deductions working sheets for any time during that year,

(4) The return must be supported by the same information in respect of each of the employees mentioned in paragraph (3)(b) as is required by regulation 73(3) to support a return under that regulation.

(5) The return must include—

(a) a statement and declaration containing a list of all deductions working sheets which the employer was required to prepare or maintain at any time during that year, and

(b) a certificate showing —

(i) the total original net tax deducted or repaid in the case of each employee,

(ii) the revised total net tax deducted or repaid in the case of each employee;

(iii) the total original net tax deducted or repaid in respect of all the employees,

(iv) the revised total net tax deducted or repaid in respect of all the employees, and

(v) the difference between the figures given in paragraphs (iii) and (iv) above.

(6) The statement and declaration and the certificate must be—

(a) signed by the employer, or

(b) if the employer is a body corporate, signed either by the secretary or by a director.

(7) Section 98A of TMA (special penalties in case of certain returns) applies to a return under paragraph (2).

Annual return of relevant payments not liable to deduction of tax (Form P38A)

Additional return in case of trade dispute

CHAPTER 4 — DEBTS OF MANAGED SERVICE COMPANIES

Interpretation of Chapter 4

97A

(1) In this Chapter—

“HM Revenue and Customs” means Her Majesty’s Revenue and Customs;

“lower amount” means the amount mentioned in regulation 97C(5);

“managed service company” has the meaning given by section 61B of ITEPA;

“paragraph (b) associate” means a person who—is within section 688A(2)(d), andis within that provision by virtue of a connection with a person who is within section 688A(2)(b);

“paragraph (c) associate” means a person who—is within section 688A(2)(d), andis within that provision by virtue of a connection with a person who is within section 688A(2)(c);

“qualifying period” means a tax period beginning on or after 6th August 2007;

“relevant apprenticeship levy debt” means a debt specified in regulation 97B;

“relevant PAYE debt” means a debt specified in regulation 97B;

“specified amount” means the amount mentioned in regulation 97C(1)(b);

“transfer notice” means the notice mentioned in regulation 97C(4);

“transferee” means the person mentioned in regulation 97C(4).

(2) In this Chapter references to section 688A, however expressed, are references to section 688A of ITEPA.

Relevant PAYE debts of managed service companies

97B

(1) A managed service company has a relevant PAYE debt or a relevant apprenticeship levy debt if a managed service company must pay an amount of tax or apprenticeship levy for a qualifying period, and—

(a) in the case of a relevant PAYE debt one of conditions A to E is met, and

(b) in the case of a relevant apprenticeship levy debt one of conditions F or G is met.

(2) Condition A is met if—

(a) an amount of tax for a qualifying period has been determined in accordance with regulation 80 (determination of unpaid tax and appeal against determination), and

(b) any part of the tax determined has not been paid within 14 days from the date on which the determination became final and conclusive.

(2A) Condition A2 is met if—

(a) HMRC serve a notice on an employer under regulation 75A(5) (power of HMRC to issue a notice and certificate in cases where regulation 67B or 67D returns are not made, etc) requiring payment of the amount of tax they consider the employer is liable to pay, and

(b) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the notice is prepared.

(3) Condition B is met if—

(a) an employer delivers a return under regulation 73 (annual return of relevant payments) for the tax year 2007-08, or any later tax year, showing an amount of total net tax deducted by the employer for that tax year,

(b) HM Revenue and Customs prepare a certificate under regulation 76 (certificate if tax in regulation 73 return is unpaid) showing how much of that amount remains unpaid, and

(c) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the certificate is prepared.

(4) Condition C is met if—

(a) HM Revenue and Customs prepare a certificate under regulation 77(6) (return and certificate if tax may be unpaid) showing an amount of tax which the employer is liable to pay for a qualifying period, and

(b) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the certificate is prepared.

(5) Condition D is met if—

(a) HM Revenue and Customs serve notice on an employer under regulation 78(4) (notice and certificate if tax may be unpaid) requiring payment of the amount of tax which they consider the employer is liable to pay, and

(b) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the notice is prepared.

(6) Condition E is met if—

(a) HM Revenue and Customs prepare a certificate under regulation 79(2) (certificate after inspection of PAYE records) showing an amount of tax which it appears that the employer is liable to pay for a qualifying period,

(b) HM Revenue and Customs make a written demand for payment of that amount of tax, and

(c) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the written demand for payment is made.

(7) Condition F is met if—

(a) an amount of apprenticeship levy for a qualifying period has been assessed in accordance with regulation 147L (assessment of unpaid apprenticeship levy), and

(b) any part of the apprenticeship levy assessed has not been paid within 14 days beginning with the date on which the assessment is served.

(8) Condition G is met if—

(a) an employer delivers a return under regulation 147D (duty to report the amount of apprenticeship levy to be paid), showing an amount of apprenticeship levy payable by the employer for the tax year,

(b) HM Revenue and Customs assesses the amount of apprenticeship levy under regulation 147L showing how much of that amount remains unpaid, and

(c) any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the assessment is served.

Transfer of debt of managed service company

97C

(1) This regulation applies if—

(a) a managed service company has a relevant PAYE debt or a relevant apprenticeship levy debt, and

(b) an officer of Revenue and Customs is of the opinion that the relevant PAYE debt or the relevant apprenticeship levy debt or a part of the relevant PAYE debt or part of the relevant apprenticeship levy debt (the “specified amount”) is irrecoverable from the managed service company within a reasonable period.

(2) HM Revenue and Customs may make a direction authorising the recovery of the specified amount from the persons specified in section 688A(2) (managed service companies: recovery from other persons).

(3) Upon the making of a direction under paragraph (2), the persons specified in section 688A(2) become jointly and severally liable for the relevant PAYE debt or the relevant apprenticeship levy debt, but subject to what follows.

(4) HM Revenue and Customs may not recover the specified amount from any person in accordance with a direction made under paragraph (2) until they have served a notice (a “transfer notice”) on the person in question (the “transferee”).

(5) If an officer of Revenue and Customs is of the opinion that it is appropriate to do so, HM Revenue and Customs may accept an amount less than the specified amount (the “lower amount”) from a transferee; but this acceptance shall not prejudice the recovery of the specified amount from any other transferee.

(6) HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, if the relevant PAYE debt is incurred before 6th January 2008.

(7) HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, unless an officer of Revenue and Customs certifies that, in his opinion, it is impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates.

(8) In determining, for the purposes of paragraph (7), whether it is impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates, the officer of Revenue and Customs may have regard to all managed service companies in relation to which a person is a person mentioned in paragraph (a) or (b) of section 688A(2) or a paragraph (b) associate.

(9) In determining which of the persons mentioned in section 688A(2)(c) and which of the paragraph (c) associates are to be served with transfer notices and the amount of those notices, HM Revenue and Customs must have regard to the degree and extent to which those persons are persons who (directly or indirectly) have encouraged or been actively involved in the provision by the managed service company of the services of the individual mentioned in that provision.

Time limits for issue of transfer notices

97D

(1) A transfer notice must be served before the end of the period determined in accordance with this regulation.

(2) Paragraphs (3) to (7B) apply if the transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2) or on a paragraph (b) associate.

(3) In a case in which condition A in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which the determination became final and conclusive.

(3A) In a case in which condition A2 in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HMRC serve notice to the employer under regulation 75A(5).

(4) In a case in which condition B in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs received the return delivered under regulation 73.

(5) In a case in which condition C in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs prepare the certificate under regulation 77(6).

(6) In a case in which condition D in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs serve notice to the employer under regulation 78(4).

(7) In a case in which condition E in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs carry out the inspection of the employer’s PAYE records.

(7A) In a case in which condition F in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which the assessment became final and conclusive.

(7B) In a case in which condition G in regulation 97B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs serves the assessment under regulation 147L.

(8) If the transfer notice is served on a person mentioned in paragraph (c) of section 688A(2) or on a paragraph (c) associate, the transfer notice must be served before the end of a period of three months beginning with the date on which the officer of Revenue and Customs certifies the matters specified in regulation 97C(7).

Contents of transfer notice

97E

(1) A transfer notice must contain the following information—

(a) the name of the managed service company to which the relevant PAYE debt or the relevant apprenticeship levy debt relates;

(b) the address of the managed service company to which the relevant PAYE debt or the relevant apprenticeship levy debt relates;

(d) the tax periods to which the relevant PAYE debt or the relevant apprenticeship levy debt relates;

(e) if the tax periods to which the relevant PAYE debt or the relevant apprenticeship levy debt relates are comprised in more than one tax year, the apportionment of the relevant PAYE debt among those tax years;

(f) which of the conditions A to G specified in regulation 97B is met;

(g) the transferee’s name;

(h) the transferee’s address;

(j) whether the transferee is a person mentioned in paragraph (a), (b) or (c) of section 688A, a paragraph (b) associate or a paragraph (c) associate;

(k) if the transferee is a person mentioned in paragraph (c) of section 688A or a paragraph (c) associate—

(i) the date on which the officer of Revenue and Customs certified the matters specified in regulation 97C(7), and

(ii) the names of the persons from whom it has been impracticable to recover the specified amount;

(l) the specified amount;

(m) the tax periods to which the specified amount relates;

(n) if the tax periods to which the specified amount relates are comprised in more than one tax year, the apportionment of the specified amount among those tax years;

(o) the address to which payment must be sent;

(p) the address to which an appeal must be sent.

(2) The transfer notice may specify the lower amount if HM Revenue and Customs are prepared to accept the lower amount from the transferee.

(3) The transfer notice must also contain a statement, made by the officer of Revenue and Customs serving the notice, that in his opinion the specified amount is irrecoverable from the managed service company within a reasonable period.

Payment of the specified amount

97F

(1) If a transfer notice is served, the transferee must pay the specified amount to HM Revenue and Customs at the address specified in the transfer notice.

(2) The transferee must pay the specified amount within 30 days beginning with the date on which the transfer notice is served (the “specified period”).

(3) If a transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2), or on a paragraph (b) associate, the specified amount carries interest from the reckonable date until the date on which payment is made.

(4) If a transfer notice is served on a person mentioned in paragraph (c) of section 688A(2), or on a paragraph (c) associate, the specified amount carries interest from the day following the expiry of the specified period until the date on which payment is made.

Appeals

97G

(1) A transferee may appeal against the transfer notice.

(2) A notice of appeal must—

(a) be given to HM Revenue and Customs at the address specified in the transfer notice within 30 days beginning with the date on which the transfer notice was served, and

(b) specify the grounds of the appeal.

(3) The grounds of appeal are any of the following—

(a) that the relevant PAYE debt (or part of the relevant PAYE debt) or the relevant apprenticeship levy debt (or part of the relevant apprenticeship levy debt) is not due from the managed service company to HM Revenue and Customs;

(b) that the specified amount does not relate to a company which is a managed service company;

(d) that the transferee is not a person mentioned in section 688A(2);

(e) that the transferee was not a person mentioned in section 688A(2) during the tax periods to which the specified amount relates;

(f) that the transferee was not a person mentioned in section 688A(2) during some part of the tax periods to which the specified amount relates

(g) that the transfer notice was not served before the end of the period specified in regulation 97D;

(h) that the transfer notice does not satisfy the requirements specified in regulation 97E;

(j) in the case of a transferee mentioned in section 688A(2)(c) or of a paragraph (c) associate, that it is not impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) or from paragraph (b) associates;

(k) in the case of a transferee mentioned in section 688A(2)(c) or of a paragraph (c) associate, that the amount specified in the transfer notice does not have regard to the degree and extent to which the transferee is a person who (directly or indirectly) has encouraged or been actively involved in the provision by the managed service company of the services of the individual mentioned in that provision.

(4) Paragraph (3)(a) is subject to regulation 97H(4).

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure on appeals

97H

(1) On an appeal that is notified to the tribunal, the tribunal shall uphold or quash the transfer notice.

(2) The general rule in paragraph (1) is subject to the following qualifications.

(3) In the case of the ground of appeal specified in regulation 97G(3)(a), the tribunal shall investigate the matter and shall—

(a) uphold the amount of the relevant PAYE debt or the relevant apprenticeship levy debt specified in the transfer notice, or

(b) reduce or increase the amount of the relevant PAYE debt or the relevant apprenticeship levy debt specified in the transfer notice to such amount as in the tribunal’s opinion is just and reasonable.

(4) If the tribunal determines the amount of the relevant PAYE debt of a managed service company under paragraph (3), that amount is conclusive as to the amount of that relevant PAYE debt or the relevant apprenticeship levy debt in any later appeal relating to that debt.

(5) In the case of the ground of appeal specified in regulation 97G(3)(f), the tribunal may reduce the amount specified in the transfer notice to an amount determined in accordance with the equation—

$RA=PTP×AS$

(6) In paragraph (5)—

RA means the reduced amount;

P means the number of days in the tax periods specified in the transfer notice during which the transferee was a person mentioned in section 688A(2);

TP means the number of days in the tax periods specified in the transfer notice;

AS means the amount specified in the transfer notice.

(7) In the case of the ground of appeal specified in regulation 97G(3)(k), the tribunal may reduce the amount specified in the transfer notice to such amount as in the tribunal’s opinion is just and reasonable.

Withdrawal of transfer notices

97J

(1) A transfer notice shall be withdrawn if the tribunal quashes it.

(2) A transfer notice may be withdrawn if, in the opinion of an officer of Revenue and Customs, it is appropriate to do so.

(3) If a transfer notice is withdrawn, HM Revenue and Customs must give written notice of that fact to the transferee.

Application of Part 6 of TMA

97K

(1) For the purposes of this Chapter, Part 6 of TMA (collection and recovery) applies as if—

(a) the transfer notice were an assessment, and

(b) the amount specified in the transfer notice, and any interest payable on that amount under paragraph (3) or (4) of regulation 97F, were income tax charged on the transferee;

and that Part of that Act applies with the modification specified in paragraph (2) and any other necessary modifications.

(2) Summary proceedings for the recovery of the specified amount may be brought in England and Wales or Northern Ireland at any time before the end of a period of 12 months beginning immediately after the expiry of the period mentioned in regulation 97F(2).

(3) The specified amount is one cause of action or one matter of complaint for the purposes of proceedings under sections 65, 66 and 67 of TMA (magistrates’ courts, county courts and inferior courts in Scotland).

(4) But paragraph (3) does not prevent the bringing of separate proceedings for the recovery of each of the amounts which the transferee is liable to pay for any tax period.

Repayment of surplus amounts

97L

(1) This regulation applies if the amounts paid to HM Revenue and Customs in respect of a relevant PAYE debt or a relevant apprenticeship levy debt exceed the specified amount.

(2) HM Revenue and Customs shall repay the difference on a just and equitable basis and without unreasonable delay.

(3) Interest on any sum repaid shall be paid in accordance with section 102 of the Finance Act 2009 (repayment interest on sums to be paid by HMRC).

Conditions where regulation 72F applies

72E

(1) Regulation 72F applies where—

(a) one or more employees have received a relevant payment;

(b) it appears to HMRC that an amount intended to represent tax on the payment—

(i) is likely to have been self-assessed by one or more of the employees, or

(ii) has not been self-assessed, but has been paid under section 59A TMA (payments on account of income tax), section 559A of ICTA (treatment of sums deducted under s.559 (sub-contractors)) or section 62 of the Finance Act 2004 (treatment of sums deducted (sub-contractors));

(d) a trigger event has occurred; and

(e) a trigger event did not occur before 6th April 2008.

(2) Condition A is that it appears to HMRC that the amount which the employer was liable to deduct—

(a) from the relevant payment; or

(b) in the case of a notional payment, from other relevant payments,

exceeds the amount actually deducted.

(3) Condition B is that it appears to HMRC that the amount for which the employer was required to account under regulation 62(5) (notional payments) in respect of the relevant payment exceeds the amount actually accounted for.

(4) Condition C is that—

(a) tax on the relevant payment was included in a determination under regulation 80 (determination of unpaid tax and appeal against determination); and

(b) the full amount of the determination is not paid within 30 days from the date on which the determination became final and conclusive.

(5) The following are trigger events—

(a) HMRC serve notice of a determination under regulation 80 that includes tax on the relevant payment;

(b) HMRC receive a return under section 8 of TMA (personal return) which includes a self-assessment which includes tax on the relevant payment as tax treated as deducted;

(i) an amended return under section 9ZA of TMA (amendment of personal or trustee return by taxpayer), or

(ii) a claim under section 33 of TMA (error or mistake),

which includes tax on the relevant payment as tax treated as deducted;

(d) HMRC receive a letter of offer.

(6) In paragraph (5)—

“letter of offer” means an offer in writing by the employer to agree an amount in settlement of the employer’s liability to pay an amount that includes tax on the relevant payment;

“tax treated as deducted” has the meaning given by regulation 185(6).

(7) For the purposes of this regulation tax is self-assessed if—

(a) it is included in a return under section 8 of TMA which includes a self-assessment; and

(b) ignoring any relevant credit, the tax is or would be assessed as payable by way of income tax.

(8) In paragraph (7), “relevant credit” means—

(a) a payment made under section 59A of TMA (payments on account of income tax) or 59B (payment of income tax and capital gains tax); or

(b) tax deducted at source or tax treated as deducted (within the meaning given by regulation 185(6)).

Recovery from employee of tax that has been self-assessed etc.

72F

(1) Where this regulation applies, HMRC may direct that the employer is not liable to pay an amount of tax to them.

(2) The direction may be in respect of one or more amounts that appear to HMRC to fall within regulation 72E(1)(b)(i) and (ii).

(3) A direction must be made by notice to both the employer and the employee, stating—

(a) the date the notice was issued;

(b) the—

(i) amount (or amounts) within regulation 72E(1)(b) to which it relates, or

(ii) employment in respect of which the relevant payment within regulation 72E(1)(a) was received and in respect of which the amount within regulation 72E(1)(b)(i) is likely to have been self-assessed, and

(4) A direction may be combined with one or more other directions relating to the same employer and may be made by issuing one notice to the employer, but each employee must be issued with a separate notice.

(5) A notice need not be issued to the employee if neither HMRC nor the employer are aware of the employee’s address or last known address.

(6) The amount specified in a notice to the employee must not be added under regulation 185(5) or 188(3)(a) (adjustments to total net tax deducted for self-assessments and other assessments) in relation to the employee.

Employee’s appeal against a direction notice

72G

(1) An employee may appeal against a direction notice under regulation 72F—

(a) by notice to HMRC,

(b) within 30 days of the issue of the direction notice,

(2) For the purposes of paragraph (1) the grounds of appeal are that—

(a) the employee did not receive a relevant payment;

(b) the amount specified in the notice is incorrect, because all or part of it did not fall within regulation 72E(1)(b)(i) or (ii);

(d) a trigger event within regulation 72E(5) occurred before 6th April 2008.

(3) On an appeal under paragraph (1) that is notified to the tribunal, the tribunal may—

(a) if it appears ... that the direction should not have been made, set aside the direction; or

(b) if it appears ... that the amount specified in the notice is incorrect, increase or reduce the amount accordingly.

CHAPTER 5 — EMPLOYMENT AND SUPPORT ALLOWANCE

Interpretation of Chapter 5

184A

In this Chapter—

“award” means an award of employment and support allowance;

“claim” means a claim for employment and support allowance;

“claimant” means a person who has made a claim;

“Department” means the Department for Work and Pensions or, in Northern Ireland, the Department for Social Development”;

“employment and support allowance” means benefit payable under—the Welfare Reform Act 2007, orin Northern Ireland, the Welfare Reform Act (Northern Ireland) 2007;

“taxable employment and support allowance” means any amount of employment and support allowance which is chargeable to income tax under Chapter 2 of Part 10 of ITEPA (tax on social security income).

Application of other regulations

184B

(1) The following regulations apply to payments of employment and support allowance made to a claimant with the modifications mentioned in paragraphs (2) to (5) —

regulation 2	interpretation
regulation 14	matters relevant to determination of code
regulation 15	flat rate codes
regulation 16	continued application of employee’s code
regulation 17	notice to employee of code
regulation 18	objections and appeals against employee’s code
regulation 19	amendment of code
regulation 20	notice to employer of amended code
regulation 21	deduction and repayment of tax by reference to employee’s code
regulation 97	retention by employer of PAYE records
regulation 98	multiple PAYE schemes
regulation 102	succession to a business etc
regulation 185	Adjusting total net tax deducted for purposes of sections 59A(1), 59B(1) and 59BA(2) TMA
regulation 205	mandatory use of electronic communications
regulation 206	employers ...
regulation 207	specified information
. . .	. . .
regulation 209	standards of accuracy and completeness
regulation 210	penalty for failing to deliver ... specified information
. . .	. . .
regulation 210C	appeals and interest
regulation 211	how information must or may be delivered by employers
regulation 214	how information must be provided by employees
regulation 216	service by post.

(2) In the application of those regulations, the expressions listed in column 1 of Table 7A have the meanings shown in column 2 of the table.

1. Expression	2. Meaning for purposes of this Chapter
Employee Employer... EmploymentRelevant payments	claimantDepartmentawardtaxable employment and support allowance

(3) In the application of regulations 20 (notice to employer of amended code) and 21 (deduction and repayment of tax by reference to employee’s code), any reference to the deduction or repayment of tax shall be read as a reference to the tax calculation which the Department is required to make at the end of the tax year or on the cessation of an award (by virtue of regulation 184I(2)(a) and 184K(2).

(4) In the application of regulation 207 (specified information) the reference to specified information shall be read as including references to—

(a) the return and accompanying information required by regulations 184G (return in respect of all claimants to taxable employment and support allowance) and 184J (annual return),

(b) Part 1 of Form P45ESA, and

(5) In the application of regulation 210 (penalty for failing to deliver specified information)—

(a) where the specified information is the return and accompanying information required by regulation 184J (annual return) the penalty will be determined in accordance with regulation 210AA, and

(b) where the specified information is 184G (return in respect of all claimants to taxable employment and support allowance), Part 1 of Form P45ESA or the information required under regulation 184E(9) the penalty will be determined in accordance with regulations 210B and 210BA.

Obtaining the claimant’s Form P45

184C

(1) A claimant who has Parts 2 and 3 of Form P45 must deliver them to the Department on making a claim for employment and support allowance which includes taxable employment and support allowance.

(2) If on making a claim, the claimant declares that the claimant’s last employer did not provide Parts 2 and 3 of Form P45, the Department may require the employer to deliver them to a specified officer of the Department.

Deductions working sheet for claimants awarded taxable employment and support allowance

184D

(1) The Department must prepare a deductions working sheet in respect of each claimant whose award includes taxable employment and support allowance.

(2) If the Department obtains Parts 2 and 3 of Form P45 relating to the claimant, it must immediately prepare the deductions working sheet using the information shown in Parts 2 and 3 of Form P45 in accordance with regulation 184E.

(3) If the Department does not obtain Parts 2 and 3 of Form P45 relating to the claimant, it must prepare the deductions working sheet in accordance with regulation 184F.

Form P45: deductions working sheet and return

184E

(1) If Parts 2 and 3 of Form P45 relate to the current tax year, the Department must record in the deductions working sheet the total payments to date shown in Parts 2 and 3 of Form P45.

(2) If Parts 2 and 3 of Form P45 relate to the current tax year and show that the cumulative basis has been used, the Department must also—

(a) record the following information from Parts 2 and 3 of Form P45 in the deductions working sheet, or

(b) keep such records as enable production of the information.

(3) If the code shown in Parts 2 and 3 of Form P45 is a K code, the information is—

(a) the code shown,

(b) the total additional pay to date,

(d) the lower of the total tax to date as at the week or month shown in Parts 2 and 3 of Form P45 or the total net tax deducted shown in them.

(4) In any other case, the information is—

(a) the code shown,

(b) the total free pay to date,

(d) the corresponding total tax to date as at the week or month shown in Parts 2 and 3 of Form P45.

(5) Paragraph (6) applies if—

(a) the claim is made by 24th May in a tax year, and

(b) Parts 2 and 3 of Form P45 show that the last relevant payment was made in the preceding tax year.

(6) The Department must complete the deductions working sheet but without recording the total payments to date or total net tax deducted (if any) shown in Parts 2 and 3 of Form P45.

(7) In cases falling within paragraphs (1) and (6), the code shown in Parts 2 and 3 of Form P45 must be treated as the claimant’s code for the purposes of these Regulations.

(8) If, in a case not falling within paragraph (6), Parts 2 and 3 of Form P45 show that the last relevant payment was made in a tax year preceding that in which the claim was made, the Department—

(a) must complete the deductions working sheet but without recording the total payments to date or total net tax deducted (if any) shown in parts 2 and 3 of Form P45, and

(b) must record the emergency code as the claimant’s code.

(9) The Department must supply the information recorded under this regulation to HMRC together with such further information as may be required for the purposes of these Regulations.

No Form P45: deductions working sheet and return

184F

In a case falling within regulation 184D(3) (no Form P45), the Department must—

(a) prepare the deductions working sheet within 14 days of the award of a taxable employment and support allowance, and

(b) record the emergency code as the claimant’s code.

Return in respect of all claimants to taxable employment and support allowance

184G

(1) When the Department first makes a payment of taxable employment and support allowance to a claimant it must deliver a return to HMRC containing the following information.

(2) The information is—

(a) the claimant’s name,

(b) the claimant’s address,

(d) the claimant’s national insurance number,

(e) the date on which the claimant’s entitlement to taxable employment and support allowance began,

(f) the weekly rate of taxable employment and support allowance being paid to the claimant,

(g) if the payment was preceded by a payment of employment and support allowance which was not taxable, the date that benefit was first paid, and

(h) the claimant’s tax reference, if known.

(3) But the return need not be delivered if the claimant certifies that the claimant—

(a) is undergoing a course of full-time education and has not had regular employment since the previous 6th April, or

(b) has not had regular employment since finishing full-time education.

Further return required in certain cases

184H

(1) On making a subsequent payment of taxable employment and support allowance to the claimant, the Department must deliver a further return in accordance with regulation 184G as if that subsequent payment were the first payment, if the condition set out in paragraph (2) is met.

(2) The condition is that the subsequent payment is the first payment to be made at a different rate from the rate subsisting at the time of that determination.

(3) In addition to providing the information listed in regulation 184G(2), the Department must indicate in the further return that the weekly rate of taxable employment and support allowance being paid to the claimant represents a revised amount.

Obligations at the end of the year

184I

(1) This regulation applies in respect of each award which includes taxable employment and support allowance and which continues beyond the end of a tax year.

(2) Before 1st June following the end of the tax year the Department must—

(a) make a tax calculation in accordance with regulation 184N if the claimant’s code is used on the cumulative basis; and

(b) subject to paragraph (3), issue a certificate to the claimant.

(3) The Department need not issue a certificate if—

(a) no taxable employment and support allowance has been paid, and

(b) a tax calculation in accordance with regulation 184N is not required.

(4) The certificate must show—

(a) the tax year to which it relates,

(b) the total employment and support allowance for the tax year excluding any amounts previously notified under regulations 184L(4) and 184Q(2)(a),

(d) the claimant’s code,

(e) the claimant’s national insurance number,

(f) the claimant’s address (if known),

(h) any previous relevant payments and any tax deducted from those relevant payments which the Department was required to take into account under regulation 184N,

(i) any total payments to date recorded by the Department in accordance with regulation 184E(1) plus the total taxable employment and support allowance for the tax year, and the corresponding total net tax deducted, and

(j) the amount of tax refunded by the Department.

Annual return

184J

(1) This regulation applies in respect of each award which includes taxable employment and support allowance.

(2) Before 1st June following the end of the tax year, the Department must deliver a return to HMRC.

(3) The return must show—

(a) the particulars specified in regulation 184I(4), and

(b) if a calculation is required under regulation 184N any amount of tax outstanding.

When an award ceases

184K

(1) For the purposes of these Regulations an award ceases when entitlement to an employment and support allowance ceases.

(2) When an award of a taxable employment and support allowance ceases, the Department must make a tax calculation in accordance with regulation 184N.

(3) The relevant date for the purposes of that calculation is the date on which the award ceases.

(4) The date on which the award ceases is the last day for which benefit was paid and was not recoverable, except that if the last day is 4th or 5th April the date is the preceding 3rd April.

(5) But the Department need not amend a tax calculation solely because the date used for the purposes of the calculation is subsequently shown to be incorrect.

Cessation of award: Form P45ESA

184L

(1) When an award of a taxable employment and support allowance ceases, the Department must immediately complete Form P45ESA.

(2) The Department must then—

(a) send Part 1 of Form P45ESA to HMRC; and

(b) provide Part 1A of P45ESA and Parts 2 and 3 of Form P45 to the claimant.

(3) The information listed in column 1 of Table 7B must, subject to the conditions set out in column 2, be provided in Parts 1 and 1A of Form P45ESA and Parts 2 and 3 of Form P45 as indicated in columns 3 to 5.

1	2	3	4	5
Information to be provided	Conditions	Form P45ESA	Form P45ESA	Form P45
		Part 1	Part 1A	Parts 2 and 3
1. the tax reference as shown in the deductions working sheet		yes	yes	yes
2. claimant’s national insurance number		yes	yes	yes
3. claimant’s name		yes	yes	yes
4. the date on which the award ceased		yes	yes	yes
5. the claimant’s code or, if more than one, the latest code for the tax year during which the award ceased		yes	yes	yes
6. whether the claimant’s code is used on the cumulative basis		yes	yes	yes
7. the tax week or month in which the award ceased	if the claimant’s code is used on the cumulative basis	yes	yes	yes
8. the total payments to date (including taxable employment and support allowance) at the date the award ceased, and the corresponding total net tax deducted	if the claimant’s code is used on the cumulative basis	yes	yes	yes
9. the taxable employment and support allowance paid during the tax year by virtue of the award in question	if the claimant’s code is used on the cumulative basis, and if different from the information supplied under item 8	yes	yes	no
10. the taxable employment and support allowance paid during the tax year in question by virtue of the award in question	if the claimant’s code is not used on the cumulative basis	yes	yes	no
11. any amount of tax outstanding	if the claimant’s code is used on the cumulative basis	yes	no	no
12. whether the claimant was self-employed immediately before the claim was made.		yes	no	no
13. whether the claimant is receiving a pension by reason of a former employment.		yes	no	no
14. the claimant’s address	if known	yes	no	no
15. the address of the benefit office		yes	yes	no
16. the date the form is completed		yes	yes	no

(4) The Department must also give notice to the claimant of—

(a) the total employment and support allowance for the tax year excluding any sums previously notified under this regulation and regulation 184Q(2)(a), and

(b) the taxable employment and support allowance included in that total.

(5) Expressions used in Parts 2 and 3 of Form P45 have the following meanings—

(a) “employee” means “claimant”;

(b) “leaving date” means “date the award ceased”; and

(6) Regulation 184M (death of claimant) modifies the requirements of this regulation if an award of taxable employment and support allowance has ceased on the death of the claimant.

(7) If Form P45ESA has not come into use when the award of taxable employment and support allowance ceases, the Department must complete form P45U and any references to form P45ESA in these regulations shall be read as a reference to form P45U.

Death of claimant

184M

(1) On being informed of the death of a claimant whose award included taxable employment and support allowance, the Department must send HMRC the completed Form P45ESA indicating in Part 1 that the claimant has died.

(2) If the Department knows the name and address of the claimant’s personal representative the Department must send the notice referred to in regulation 184L(4) to the personal representative.

(3) But if the Department has not been notified of the name and address of the claimant’s personal representative within 30 days of the claimant’s death, the Department is not required—

(a) to make a tax calculation under regulation 184N, nor

(b) to issue the notice under regulation 184L(4).

Tax calculation

184N

(1) This regulation applies, subject to regulation 184O, if the Department is required by regulation 184I or 184K to make a tax calculation.

(2) The Department must calculate in respect of the claimant as at the relevant date—

(a) the total payments to date, and

(b) the claimant’s total tax.

(3) If the recorded tax exceeds the claimant’s total tax, the Department must repay the excess to the claimant.

(4) But if the recorded tax is less than the claimant’s total tax—

(a) the difference is tax outstanding for the purposes of regulation 184J(3)(b) or item 11 of table 7B in regulation 184L(3), and

(b) the Department must treat the claimant’s code as issued by HMRC on the non-cumulative basis from the relevant date.

(5) In this regulation—

“claimant’s total tax” means—if the claimant’s code is a K code, the lesser of—50% of the claimant’s total payments to date, andthe tax due in accordance with the appropriate tax tables in respect of the claimant’s total taxable payments to date at the relevant date,in any other case, the tax due in accordance with the appropriate tax tables in respect of the claimant’s total taxable payments to date at the relevant date;

“recorded tax” means the total tax to date or (as the case may be) the total net tax deducted which was recorded in accordance with regulation 184E(3) or (4) when the claim was made;

“relevant date” means—the end of the tax year, if the calculation is required by regulation 184I,the date used for the purposes of the calculation, if the calculation is required by regulation 184K;

“total payments to date” means any payments to date recorded by the Department in accordance with regulation 184E(1) plus the total taxable employment and support allowance.

No tax calculation required in certain cases

184O

(1) A tax calculation made under regulation 184N is not required in any of the following cases—

(a) if the claimant does not give the Department Parts 2 and 3 of form P45 and does not certifiy in accordance with regulation 184G(3) (students etc),

(b) if the claimant gives the Department Parts 2 and 3 of Form P45 but they do not relate to the claimant’s last employment or award before the present award, whichever is the later,

(d) if it appears to the Department on the occasion of a claim that a previous award should have been treated as having ceased in accordance with regulation 184K (when an award ceases), or

(e) if the claimant’s code is a nil tax code, basic rate code or higher rate code.

(2) Those cases are treated as if HMRC had made a direction that the claimant’s code must be used on the non-cumulative basis.

(3) Those cases are subject to a notification from HMRC under regulation 184P that revised particulars are to be substituted and used.

Claimant’s code etc to be used for calculations

184P

(1) This regulation applies if, in respect of a claimant, the Department receives notification from HMRC of—

(a) a code or amended code,

(b) total payments to date, or

(2) The Department must record that notification in substitution for any previous record and use it for the purpose of all calculations required under this Chapter.

Notification of taxable employment and support allowance

184Q

(1) Paragraph (2) applies if—

(a) after a certificate under regulation 184I(2)(b) has been issued (or would have been issued but for regulation 184I(3)), or

(b) after a notice has been issued under regulation 184L(4) or this regulation,

further taxable employment and support allowance is paid to, or taxable employment and support allowance overpaid is recovered from, the claimant.

(2) The Department must—

(a) give notice to the claimant of the revised figure of total employment and support allowance and the taxable employment and support allowance included in that revised figure in accordance with the relevant regulation, and

(b) notify HMRC of the sums paid or refunded.

Recording the amount of taxable employment and support allowance

184R

Whenever a payment of employment and support allowance is made, the Department must record the taxable employment and support allowance included in the payment.

Finance

184S

(1) HMRC must advance monies to the National Funds of Great Britain and Northern Ireland at intervals to be agreed with the Department for use in making repayments of income tax under these Regulations.

(2) The Department must provide HMRC with a quarterly statement of receipts and payments made under this Chapter.

Procedure in Form P46 cases: (a) seconded expatriate is national of EEA state or Commonwealth citizen, or (b) employee is not seconded expatriate and Statement A applies

Procedure in Form P46 cases: (a) Statement B applies (not seconded expatriate), or (b) Statement B or C applies (seconded expatriate)

Retention by employer of PAYE records

Appeal to the tribunal

Information to be provided in Form P46(Pen) if code not known: non UK residents

Information (Form P46(Pen)) and procedure if code not known: UK residents

Penalty for failing to deliver specified information

Penalty: regulation 73 return and accompanying information (Forms P35 and P14)

210A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penalty: Form P45 (Part 1 or Part 3), P46 or P46(Pen)

210B

(1) This regulation applies for the tax years ending 5th April 2012 and 5th April 2013 (the “relevant period”).

(2) Table 9A sets out the penalties for the relevant period depending on the number of items of specified information the employer has failed to deliver in each tax quarter falling within that period.

1. Number of items of specified information the employer has failed to deliver in the tax quarter	2. Penalty
1-2	Nil
3-49	£100
50 – 149	£300
150 – 299	£600
300 – 399	£900
400 - 499	£1,200
500 – 599	£1,500
600 - 699	£1,800
700 – 799	£2,100
800 – 899	£2,400
900 – 999	£2,700
1000 or more	£3,000

(3) Each of the types of specified information mentioned in sub-paragraphs (a) to (d) of regulation 207(1) counts as a separate item of specified information for this purpose.

(4) An item of specified information counts even if it relates to the same employee as one or more other items.

Appeals and interest

210C

(1) An employer is not liable to a penalty if the employer had a reasonable excuse for failing to comply with regulation 205 ... which had not ceased at the time the ... specified information was delivered.

(2) A notice of appeal against a determination under section 100 of TMA of a penalty can only be on the grounds that—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(aa) the employer is not regarded as an employer the purposes of this Chapter

(b) the employer did comply with regulation 205 ...,

(d) paragraph (1) applies.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Section 103A of TMA (interest on penalties) applies to this penalty.

Meaning of Form P45, P46 and P46(Pen)

Mandatory use of electronic communication for delivering specified information

205A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General provisions relating to this Chapter

205B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employers and specified employers

Relevant annual return

206A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Specified information

E-filing notice and appeals

Standards of accuracy and completeness

Penalty for failing to deliver relevant annual returns and specified information

Penalty: relevant annual return for the tax year ending 5th April 2010

Penalty: relevant annual return for the tax year ending 5th April 2011 and subsequent years

210AA

Table 9ZA sets out the penalty for the tax year ending 5th April 2011 and subsequent years, depending on the number of employees for whom particulars should have been included with the specified information.

1 Number of employees for whom particulars should have been included with the specified information	2 Penalty
1-56-4950-249250-399400-499500-599600-699700-799800-899900-9991000 or more	£100£300£600£900£1200£1500£1800£2100£2400£2700£3000

Penalty: form P45 (Part 1 or Part 3), P46 or P46 (Pen); tax years ending 5th April 2012 and 5th April 2013

Appeals and interest

Additional rate code: deductions

32A

If the employee’s code is the additional rate code the employer must deduct tax at the additional rate and regulations 22 and 26 (cumulative and non-cumulative basis) do not apply.

Nil tax code: no deductions or repayments

Relevant pension payments and relevant payments being received by a pensioner

54A

(1) This regulation applies if the pensioner begins to receive relevant pension payments whilst continuing to receive relevant payments from their employer.

(2) On making relevant pension payments to the pensioner, the pension payer must deduct tax on the non-cumulative basis using the 0T tax code.

(3) The pension payer must send to HMRC the following information in the Form P46(Pen)—

(a) the pensioner’s national insurance number, if known,

(b) the pensioner’s full name,

(d) the pensioner’s date of birth,

(e) the pensioner’s full address including postcode,

(f) the date upon which the pension payments started,

(g) the pensioner’s work payroll number and the department or branch (if any) in which the pensioner is employed,

(h) confirmation that the recipient of the relevant payments is a pensioner,

(i) the pension payer’s PAYE reference,

(j) the pension payer’s name,

(k) the pension payer’s full address including postcode, and

(l) the tax code used in relation to the pension.

(4) Before sending the Form P46(Pen), the pension payer must indicate in the form that code 0T is being used on a non-cumulative basis in respect of the pension.

Procedure in Form P46 (Pen) cases: code treated as issued by HMRC

54B

(1) The 0T code used by the pension payer in accordance with regulation 54A is treated, for the purposes of Parts 2 to 4 (codes; deduction and repayment of tax; payments, returns and information), as having been issued by HMRC as the code for use in respect of the pensioner.

(2) This does not apply for the purposes of regulation 18 (objections and appeals) and regulations 58, 60 and 61 ... late presentation of Form P45 etc).

PAYE pension income paid by former employer

PAYE pension income paid by other pension payer

Information to be provided in Form P46(Pen) if code not known: non UK residents

Information (Form P46(Pen)) and procedure if code not known: UK residents

UK resident pensioner’s code treated as issued by Inland Revenue

Late presentation of Form P45

Subsequent procedure on issue of UK resident pensioner’s code

Large employers

198A

(1) “Large employer” means an employer treated as paying PAYE income to 250 or more employees at the specified date.

(2) An employer is treated as paying PAYE income to an employee at the specified date if the employer—

(a) is required at that date by these Regulations to prepare or maintain a deductions working sheet in respect of that employee, and

(b) has not sent to HMRC Part 1 of Form P45 in respect of that employee or, as the case may be, has not indicated in a return under regulation 67B or 67D that the employee’s employment has ceased.

(3) The specified date for a particular tax year is 31st October in the preceding tax year.

Large employers required to make specified payments electronically

E-payment notices and appeal

Employer in default if specified payment not received by applicable due date

Default notice and appeal

Default surcharge

Surcharge notice and appeal

Employers

Penalty for failing to deliver... specified information

Penalty: forms P35 and P14

Penalty: form P45 (Part 1 or Part 3), P46 or P46(Pen); tax years ending 5th April 2014 and subsequent years

210BA

(1) Table 9AA sets out penalties depending on the number of items of specified information the employer has failed to deliver in each tax quarter falling within the tax year ending 5th April 2014 and subsequent years.

1 Number of items of specified information the employer has failed to deliver in the tax quarter	2 Penalty
1-49	£100
50-149	£300
150-299	£600
300-399	£900
400-499	£1,200
500-599	£1,500
600-699	£1,800
700-799	£2,100
800-899	£2,400
900-999	£2,700
1000+	£3,000

(2) Each of the types of specified information mentioned in sub-paragraphs (a) to (d) of regulation 207(1) counts as a separate item of specified information for this purpose.

(3) An item of specified information counts even if it relates to the same employee as one or more other items.

Appeals and interest

Real Time Information employers

2A

(1) The following are Real Time Information employers—

(a) an employer who has entered into an agreement with HMRC to comply with the provisions of these Regulations which are expressed as relating to Real Time Information employers,

(b) an employer within paragraph (2),

(d) on and after 6th October 2013, all employers , except employers within paragraph (3).

(2) An employer is within this paragraph if the employer has been given a general or specific direction by the Commissioners for Her Majesty’s Revenue and Customs before 6th October 2013 to deliver to HMRC returns under regulation 67B (real time returns of information about relevant payments).

(3) An employer is within this paragraph if the employer—

(a) has an existing special arrangement under regulation 141 (direct collection and special arrangements), and

(b) has not been given a direction under paragraph (2) by the Commissioners for Her Majesty’s Revenue and Customs.

Real Time Information pension payers

2B

(1) The following are Real Time Information pension payers—

(a) a pension payer who has entered into an agreement with HMRC to comply with the provisions of these Regulations which are expressed as relating to Real Time Information pension payers or Real Time Information employers,

(b) a pension payer within paragraph (2),

(2) A pension payer is within this paragraph if the pension payer has been given a general or specific direction by the Commissioners for Her Majesty’s Revenue and Customs before 6th October 2013 to deliver to HMRC returns under regulation 67B (real time returns of information about relevant payments).

Net PAYE income

Relevant payments

Excluded business expenses

Relevant pension payments

Meaning of “code” etc

Employee’s code

PAYE threshold

Determination of code in respect of recovery of relevant debts

14A

(1) HMRC may determine a code so as to effect recovery of all or part of a relevant debt within the meaning of section 684 of ITEPA (sums owed to HMRC).

(2) A determination in reliance on paragraph (1) does not prevent recovery by other means (whether or not under a provision of TMA) of all or any part of a relevant debt that is not recovered by deduction in accordance with the code (whether or not it was at any stage expected to be recovered by deduction).

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The Income Tax (Pay As You Earn) Regulations 2003

Employee’s appeal against a direction notice where condition A is met

72B

Employee’s appeal against a direction notice where condition A is met

72C

Appeals: supplementary provisions

72D

Employee’s appeal against direction notice

81A

Procedure in Form P46 Cases: Statement A applies

Procedure in Form P46 Cases: Statement B applies

Procedure in Form P46 Cases: Statement C applies or Form P46 not signed when required

CHAPTER 2A — SOCIAL SECURITY LUMP SUMS

Interpretation of Chapter 2A

133A

Application of other Parts

133B

Determination of Rate of Deduction

133C

Notification by Recipient of Notice of Tax Rate

133D

Certificate of tax deducted

133E

Repayment to recipient during tax year

133F

Records and notices

133G

Other PAYE income of recipient

133H

Income subject to retrospective tax provision — information to employee

36A

PAYE income paid after employment ceased

Income paid after cessation of employment subsequently becoming subject to PAYE

37A

Death of employee

Death of pensioner

Procedure in cases of retrospective earnings: code treated as issued by HMRC

50A

Late presentation of Form P45

Late presentation of Form P45: employer’s duties

Form P46 cases: subsequent procedure on issue of employee’s code

Deduction working sheets: retrospective employment income in closed tax year

66A

Information to employees about payments and tax deducted (Form P60)

Revised information to employees about payments and tax deducted (Form P 60)

67A

Amended returns of relevant payments and tax (Forms P14 and P35(RL))

73A

Annual return of relevant payments not liable to deduction of tax (Form P38A)

Additional return in case of trade dispute

CHAPTER 4 — DEBTS OF MANAGED SERVICE COMPANIES

Interpretation of Chapter 4

97A

Relevant PAYE debts of managed service companies

97B

Transfer of debt of managed service company

97C

Time limits for issue of transfer notices

97D

Contents of transfer notice

97E

Payment of the specified amount

97F

Appeals

97G

Procedure on appeals

97H

Withdrawal of transfer notices

97J

Application of Part 6 of TMA

97K

Repayment of surplus amounts

97L

Conditions where regulation 72F applies

72E

Recovery from employee of tax that has been self-assessed etc.

72F

Employee’s appeal against a direction notice

72G

CHAPTER 5 — EMPLOYMENT AND SUPPORT ALLOWANCE