Part 2: Relocation of section 24 of FA 1974
Overview
1288.This Part inserts sections 8(4A) and (4B), 8ZA and 15A of TMA. The inserted provisions are based on section 24 of FA 1974 (returns of persons treated as employees).
1289.Section 24 of FA 1974 contains provisions enabling information to be obtained about the foreign earnings of individuals working in the United Kingdom. The section covers both employers and employees.
Section 8(4A) and (4B) of TMA: Personal return
1290.Section 8(4A) and (4B) provide that a notice under section 8 of TMA may require certain employees to provide details of their general earnings.
1291.Section 8(4B) includes the reference to “general earnings” that was inserted in section 24 of FA 1974 by ITEPA. Section 7(3) of ITEPA defines “general earnings” for the purposes of the Income Tax Acts and the Corporation Tax Acts.
Section 8ZA of TMA: Interpretation of section 8(4A)
1292.Section 8ZA lists the conditions that must be met if a person is to be subject to section 8(4A).
1293.The section sets out a series of conditions to be met. This approach differs from the source which simply referred to the conditions in turn.
1294.Subsection (4) refers to a person who carries on a trade. The definition of trade for the purposes of TMA is to be found in section 118 of that Act. The definition of trade for the purposes of section 24 of FA 1974 is to be found in section 989 of ITA. The definitions differ in form but not in substance. It is therefore not considered that the change in definition constitutes a change in the law.
Section 15A of TMA: Non-resident’s staff are UK client’s employees for section 15 purposes
1295.Section 15A provides that any person for whose benefit certain employees perform duties may be required to provide details of those employees in response to a notice issued under section 15 of TMA.
1296.The format follows that established by section 8ZA and uses similar wording.
1297.The origin for the section is shown in part to be “drafting”. This refers to subsection (5) which states that section 15 applies “only so as to enable P to be required to make a return …”. The source stated that section 15 applied “only so as to require him to make a return …”. The intention is to make clear that a return under section 15 is not mandatory simply because the conditions in subsections (2) to (4) of section 15A are met. A notice to make a return under section 15 asking for the names and addresses of the employees must first be issued.
