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The Social Security (Contributions) Regulations 2001

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Regulation 67(2)

SCHEDULE 4U.K. [F1Provisions derived from the Income Tax Acts and the Income Tax (Pay As You Earn) Regulations 2003]

Textual Amendments

PART IU.K. GENERAL

InterpretationU.K.

1.—[F2(1) In this Schedule the “PAYE Regulations” means the Income Tax (Pay As You Earn) Regulations 2003.

(2) In this Schedule, except where the context otherwise requires—

“aggregated” means aggregated and treated as a single payment under paragraph 1(1) of Schedule 1 to the Act;

“allowable pension contributions” means any sum paid by an employee by way of contribution towards a pension fund or scheme which is withheld from the payment of PAYE income and for which a deduction must be allowed from employment income under section 592(7) or 594(1) of the Taxes Act (exempt approved schemes and exempt statutory schemes);

[F3“closed tax year” means any year preceding the current year and cognate expressions shall be construed accordingly;]

“Compensation of Employers Regulations” means the Statutory Maternity Pay (Compensation of Employers) and Miscellaneous Amendments Regulations 1994 and the Statutory Sick Pay Percentage Threshold Order 1995

“deductions working sheet” means any form of record on or in which are to be kept the matters required by this Schedule in connection with an employee’s general earnings and earnings-related contributions or the form issued by the Inland Revenue under paragraph 31 or under regulation 35 of the PAYE Regulations (simplified deduction scheme);

“earnings-related contributions” means contributions payable under the Act by or in respect of an employed earner in respect of employed earner’s employment;

“employed earner” and “employed earner’s employment” have the same meaning as in the Act;

“employee” means any person in receipt of general earnings;

“employer” means the secondary contributor determined—

(a)by section 7 of the Act;

(b)under regulation 5 of, and Schedule 3 to, the Social Security (Categorisation of Earners) Regulations 1978; or

(c)under regulation 122;

“general earnings has the meaning given in section 7(3) of ITEPA 2003;”;

[F3“HMRC” means Her Majesty’s Revenue and Customs;]

“Inland Revenue” means any officer of the Board of Inland Revenue;

“mariner” has the same meaning as in regulation 115;

“the Reimbursement Regulations” means the Employer’s Contributions Re-imbursement Regulations 1996;

“tax month” means the period beginning on the 6th day of any calendar month and ending on the 5th day of the following calendar month;

“tax period” means a tax quarter where paragraph 11 has effect, but otherwise means a tax month;

“tax quarter” means the period beginning on 6th April and ending on 5th July, or beginning on 6th July and ending on 5th October, or beginning on 6th October and ending on 5th January, or beginning on 6th January and ending on 5th April;

“voyage period” has the same meaning as in regulation 115;

“year” means tax year;

and other expressions have the same meaning as in the Income Tax Acts.]

(3) For the purposes of paragraphs 7(13), 9, 10, 11 and 22, “primary Class 1 contributions” and “earnings-related contributions” shall, unless the context otherwise requires, include any amount paid on account of earnings-related contributions in accordance with the provisions of regulation 8(6).

Textual Amendments

Multiple employersU.K.

[F42.—(1) If—

(a)an employer has made an election under regulation 98 of the PAYE Regulations to be treated as a different employer in respect of each group of employees specified in the election, and

(b)no improper purpose notice has been given, or if one has been given it has been withdrawn,

he shall be treated as having made an identical election for the purposes of this Schedule.

(2) In this paragraph an “improper purpose notice” is a notice issued to the employer stating that it appears to the Inland Revenue that the election is made wholly or mainly for an improper purpose within the meaning of regulation 99(2) of the PAYE Regulations.]

Textual Amendments

Intermediate employersU.K.

3.—(1) Where an employee works for a person who is not his immediate employer, that person shall be treated as the employer for the purpose of this Schedule, and the immediate employer shall furnish the principal employer with such particulars of the employee’s [F5general earnings] as may be necessary to enable the principal employer to comply with the provisions of this Schedule.

This is subject to the qualification in sub-paragraph (4).

(2) In this paragraph—

  • “the principal employer” means the person specified as the relevant person in the direction referred to in sub-paragraph (4), and

  • “the immediate employer” means the person specified as the contractor in that direction.

(3) If the [F6employee’s general earnings] are actually paid to him by the immediate employer—

(a)the immediate employer shall be notified by the principal employer of the amount of earnings-related contributions which may be deducted when [F7those earnings] are paid to the employee, and may deduct the amount so notified to him accordingly; and

(b)the principal employer may make a corresponding deduction on making to the immediate employer the payment out of which [F8those earnings] will be paid.

(4) This paragraph only applies if a direction has been given by the Board under [F9section 691 of ITEPA 2003] (PAYE: mobile UK workforce)F10.

(5) Where an employee is paid a sickness payment which by virtue of regulation 23 is not made through the secondary contributor in relation to the employment—

(a)the person making that payment shall furnish the secondary contributor with such particulars of that payment as may be necessary to enable the secondary contributor to comply with this Schedule; and

(b)for the purposes only of this Schedule the secondary contributor shall be deemed to have made the sickness payment.

Textual Amendments

F10Section 203E was inserted by section 126 of the Finance Act 1994 (c. 9).

Employer’s earnings-related contributionsU.K.

4.  If, under this Schedule, a person [F11pays] any earnings-related contributions which, under section 6(4) of the Act F12, another person is liable to pay, his payment of those contributions shall be made as agent for that other person.

Textual Amendments

F11Word in sch. 4 para. 4 substituted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 5

F12This section was substituted by paragraph 2 of Part I of Schedule 9 to the Welfare Reform Act.

[F13IntermediariesU.K.

4A.—(1) Where any payment of [F14general earnings] of an employee is made by an intermediary of the employer, the employer shall be treated, for the purposes of this Schedule other than–

(a)paragraph 7(1),

(b)paragraph 7(3)(a),

(c)the references to a subsequent payment of [F14general earnings] or of monetary earnings in paragraph 7(3) and (8), and

(d)paragraph 7(11),

as making the payment of those [F14general earnings] to the employee.

(2) For the purposes of this paragraph, a payment of [F14general earnings] of an employee is made by an intermediary of the employer if it is made–

(a)either–

(i)by a person acting on behalf of the employer and at the expense of the employer, or

(ii)by a person connected with him, or

(b)by trustees holding property for any persons who include, or class of persons which includes, the employee.

(3) Section 839 of the Taxes Act (connected persons) applies for the purposes of this paragraph.]

Textual Amendments

F13Sch. 4 para. 4A inserted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, reg. 6

[F15Continuation of proceedings etc.U.K.

5.  Any legal proceedings or administrative act authorised by or done for the purposes of this Schedule and begun by one Inland Revenue officer may be continued by another officer, and any officer may act for any division or other area.]

Textual Amendments

PART IIU.K. DEDUCTION OF EARNINGS-RELATED CONTRIBUTIONS

Deduction of earnings-related contributionsU.K.

6.—(1) Every employer, on making during any year to any employee any payment of [F16general earnings] in respect of which earnings-related contributions are payable, or are treated as payable, or on making any payment of statutory maternity pay—

(a)shall, if he has not already done so, prepare, or in the case of an employee to whom [F17regulation 35 of the PAYE Regulations (simplified deduction scheme)] applies, maintain a deductions working sheet for that employee, and

(b)may deduct earnings-related contributions in accordance with this Schedule.

[F18(1A) Where a liability to pay retrospective contributions has arisen in respect of an employee, an employer shall amend the relevant deductions working sheet or where necessary prepare one in respect of that employee.]

(2) Subject to sub-paragraph (3), an employer shall not be entitled to recover any earnings-related contributions paid or to be paid by him on behalf of any employee otherwise than by deduction in accordance with this Schedule.

(3) Sub-paragraph (2) does not apply to secondary Class 1 contributions in respect of which 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 (election in respect of transfer of secondary contribution liability on [F19relevant employment income]) F20 if the election provides for the collection of the amount in respect of which liability is transferred.

Textual Amendments

F19Words in Sch. 4 para. 6(3) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 7(a)

F20Paragraph 3B was inserted by section 77(2) of the Child Support, Pensions and Social Security Act 2000 (c. 19).

Calculation of deductionU.K.

7.—(1) Subject to sub-paragraph (2), on making any payment of [F21general earnings] to the employee, the employer may deduct from those [F21general earnings] the amount of the earnings-related contributions based on those [F21general earnings] F22... which the employee is liable to pay under section 6(4) of the Act [F23(the “section 6(4)(a) amount”)] .

(2) Where two or more payments of [F21general earnings] fall to be aggregated, the employer may deduct the amount of the earnings-related contributions based on those [F21general earnings], which are payable by the employee, either wholly from one such payment or partly from one and partly from the other or any one or more of the others.

[F24(3) If the employer–

(a)on making any payment of [F21general earnings] to an employee does not deduct from those [F21general earnings] the full section 6(4)(a) amount, or

(b)is treated as making a payment of [F21general earnings] by paragraph 4A,

he may recover, in a case falling within paragraph (a) the amount not so deducted or, in a case falling within paragraph (b) the section 6(4)(a) amount, by deduction from any subsequent payment of [F21general earnings] made by the employer to that employee during [F25the same year and, where the case falls within paragraph (b) [F26or sub-paragraph 4(a) or (f)]].

  • This sub-paragraph is subject to sub-paragraphs (4) and (5).]

[F27(3A) Where an amount has been treated as retrospective earnings paid to or for the benefit of an employee, the employer may deduct the retrospective contributions based on those earnings from any payment of general earnings made by him to that employee—

(a)after the relevant retrospective contributions regulations come into force, and

(b)during the same and the following year.

This sub-paragraph is subject to sub-paragraph (5).]

(4) Sub-paragraph (3) applies only where—

(a)the under-deduction occurred by reason of an error made by the employer in good faith;

(b)the [F21general earnings] in respect of which the under-deduction occurred are treated as earnings by virtue of regulations made under section 112 of the Act (certain sums to be earnings)F28;

(c)the under-deduction occurred as a result of the cancellation, variation or surrender of the contracting-out certificate issued in respect of the employment in respect of which the payment of [F21general earnings] is made; or

(d)the [F21general earnings] in respect of which the under-deduction occurred are, by virtue of regulation 23, not paid through the secondary contributor in relation to the employment; F29...

[F30(e) the employer is treated as making a payment of [F21general earnings] by paragraph 4A][F31; or]

[F32(f)the payment in question is made to a person whose place of employment is outside the United Kingdom and on whose general earnings Class 1 contributions are, but income tax is not, payable.]

(5) For the purposes of sub-paragraphs (3), [F33(3A),] (4), (8) and (11)—

(a)the amount which by virtue of those sub-paragraphs may be deducted from any payment, or from any payments which fall to be aggregated, shall be an amount in addition to, but not in excess of, the amount deductible from those payments under the other provisions of this Schedule; and

(b)for the purposes of Part III of this Schedule an additional amount which may be deducted by virtue of those sub-paragraphs [F34in a case falling within paragraph (a) of any of those sub-paragraphs [F35except sub-paragraph (3A)]] shall be treated as an amount deductible under this Schedule only in so far as the amount of the corresponding under-deduction has not been so treated.

[F36This is subject to the following qualification.]

[F37(5A) Where a payment—

(a)falls within sub-paragraph (4)(e) [F38or (f)],

(b)comprises a beneficial interest in [F39securities], or

(c)is treated as earnings within the meaning of Part 7 of the Income Tax (Earnings and Pensions) Act 2003,

sub-paragraph (5B) applies.

(5B) If this sub-paragraph applies—

(a)sub-paragraph (5)(a) shall have effect as if “, but not in excess of,” were omitted; and

(b)sub-paragraph (8) shall have effect as if at the end there were added “or the following year”]

(6) Sub-paragraph (8) applies where an employer makes a payment consisting either soley of non-monetary earnings, or a combination of monetary and non-monetary earnings, to—

(a)an employee;

(b)an ex-employee,

and at the time of the payment of those earnings there are no, or insufficient, monetary earnings from which the employer could deduct the [F40section 6(4)(a) amount].

(7) In sub-paragraph (6)(b) “ex-employee” means a person who—

(a)ceases to be employed by the employer in a particular year (“the cessation year”); and

(b)receives such earnings from the employer after the cessation of employment but in the cessation year.

[F41(8) Where, in the circumstances specified in sub-paragraph (6), the employer–

(a)does not deduct from the earnings referred to in that sub-paragraph the full section 6(4)(a) amount, or

(b)is treated as making a payment of [F21general earnings] by paragraph 4A,

he may recover, in a case falling within paragraph (a) the amount not so deducted or, in a case falling within paragraph (b) the section 6(4)(a) amount, by deduction from any subsequent payment of monetary earnings to that employee, or ex-employee (as the case may be) during the same year.

  • This sub-paragraph is subject to sub-paragraph (5).]

(9) Sub-paragraph (11) applies if—

(a)a person (“the ex-employee”) ceases in a particular tax year (“the cessation year”) to be employed by a particular employer (“the employer”); and

(b)the ex-employee receives from the employer in the cessation year, after the cessation of employment, earnings in the form of—

(i)a beneficial interest in [F42securities],

(ii)a conditional interest in [F42securities] or a beneficial interest in convertible [F42securities] treated as earnings under [F43regulation 22(5), (6) or (7)] ,

(iii)any gain on which the ex-employee is chargeable to tax by virtue of [F44section 4(4)(a) of the Act]; and

(c)at the time of the payment of those earnings there are no monetary earnings, or insufficient monetary earnings, from which the employer could deduct the [F45section 6(4)(a) amount].

F46(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) Where, in the circumstances specified in sub-paragraph (9), the employer has not deducted, from the earnings referred to in sub-paragraph (9)(b), the full amount of earnings-related contributions which by virtue of this Schedule he is entitled to deduct, he may, without prejudice to sub-paragraph (8) but subject to sub-paragraph (12)(b), recover the amount so under-deducted by deduction from the proceeds of sale of some, or all, of—

(a)the [F48securities] referred to in of sub-paragraph 9(b)(i) and (ii); or

(b)the [F48securities] which form the subject matter of the option referred to in sub-paragraph (9)(b)(iii).

(12) For the purposes of sub-paragraph (11)—

(a)the whole of the amount under-deducted may be recovered from the proceeds of sale of some, or all, of the [F48securities] referred to in that sub-paragraph; and

(b)the employee’s prior written consent to that sale and the recovery of all or part of the under-deduction from the proceeds thereof, shall be required.

(13) Subject to sub-paragraph (14), the employer shall record on the deductions working sheet for that employee the name and national insurance number of the employee, the year to which the working sheet relates, the appropriate category letter in relation to the employee (being the appropriate category letter indicated by the Board) and, in so far as relevant to that category letter, the following particulars regarding every payment of [F21general earnings] which he makes to the employee namely—

(a)the date of payment;

(b)the amount of—

(i)earnings up to and including the current lower earnings limit where earnings equal or exceed that figure,

(ii)earnings which exceed the current lower earnings limit but do not exceed the current primary threshold and the current secondary threshold,

(iii)earnings which exceed the current primary threshold and the current secondary threshold but do not exceed the current upper earnings limit,

[F49(iv)the sum of the primary Class 1 contributions and secondary Class 1 contributions payable on all the employee’s earnings, other than contributions recovered under sub-paragraph (3); and

(v)the primary Class 1 contributions payable on the employee’s earnings;]

(vi)any statutory maternity pay;

[F50(vii)any statutory paternity pay; and

(viii)any statutory adoption pay.

The amounts to be recorded under sub-paragraphs (iv) and (v) are the amounts of contributions after deducting the amount of any reduction calculated in accordance with section 41(1) to (1B) or section 42A(1) to (2A) of the Pensions Act (“the reduction”), subject to the following qualification.

If the amount of the reduction exceeds the amount of the contributions in respect of which it falls to be made, the amount to be entered under sub-paragraph (v) is nil.]

F51(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14) Where 2 or more payments of [F21general earnings] fall to be aggregated, the employer, instead of recording under heads (iv) and (v) of sub-paragraph (13)(b) separate amounts in respect of each such payment, shall under each head record a single amount, being the total of the contributions appropriate to the description specified in that head, in respect of the aggregated payments.

(15) When an employer pays [F21general earnings] he shall record under the name of the employee to whom he pays the [F21general earnings]—

(a)the date of payment;

(b)the amount of the [F21general earnings], excluding any allowable [F52pension] contributions; and

(c)any allowable [F52pension] contributions;

and retain the record for a period of three years after the end of the tax year in which the [F21general earnings] were paid.

Textual Amendments

F22Word in Sch. 4 para. 7(1) omitted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(2)

F23Words in Sch. 4 para. 7(1) inserted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(2)

F24Sch. 4 para. 7(3) substituted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(3)

F28Section 112 was amended by paragraph 51(4) of Schedule 1 to the Employment Rights Act 1996 (c. 18) and paragraph 21 of Schedule 3 to the Transfer Act.

F30Sch. 4 para. 7(4)(e) and word inserted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(4)

F34Words in Sch. 4 para. 7(5)(b) inserted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(5)

F40Words in Sch. 4 para. 7(6) substituted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(6)

F41Sch. 4 para. 7(8) substituted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(7)

F45Words in Sch. 4 para. 7(9)(c) substituted (28.11.2002) by The Social Security (Contributions)(Amendment No. 5) Regulations 2002 (S.I. 2002/2929), regs. 1, 7(8)

F49Sch. 4 para. 7(13)(b)(iv)-(v) substituted (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(2)(a)(i)

F50Sch. 4 para. 7(13)(b)(vii)-(viii) and words 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(2)(a)(ii)

F51Sch. 4 para. 7(13)(c) omitted (with effect in accordance with reg. 1(1) of the amending S.I.) by virtue of The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(2)(b)

[F53Records where liability transferred from secondary contributor to employed earner: relevant employment incomeU.K.

8.  Where an election has been made for the purposes of paragraph 3B(1) of Schedule 1 to the Act (elections about transfer of liability for secondary contributions in respect of relevant employment income), the secondary contributor shall maintain records containing—

(a)a copy of any such election;

(b)a copy of the notice of approval issued by the Inland Revenue under paragraph 3B(1)(b) of that Schedule;

(c)the name and address of the secondary contributor who has entered into the election;

(d)the name of the employed earner; and

(e)the national insurance number allocated to the employed earner.]

Textual Amendments

F53Sch. 4 para. 8 heading substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 7(b)

Certificate of contributions paidU.K.

9.—(1) Where the employer is required to give the employee a certificate in accordance with [F54regulation 67 of the PAYE Regulations (information to employees about payments and tax deducted (Form P 60))], the employer shall enter on the certificate, in respect of the year to which the certificate relates—

(a)the amount of any earnings up to and including the current lower earnings limit where earnings equal or exceed that figure;

(b)the amount of any earnings in respect of which primary Class 1 contributions were, by virtue of section 6A of the Act F55, treated as having been paid, which exceed the current lower earnings limit but do not exceed the current primary threshold, other than earnings from non-contracted-out employment in respect of which primary Class 1 contributions were, by virtue of that section and regulation 127, treated as having been paid at the reduced rate;

(c)the amount of any earnings in respect of which primary Class 1 contributions were payable which exceed the current primary threshold but do not exceed the current upper earnings limit, other than earnings from non-contracted-out employment in respect of which primary Class 1 contributions were payable at the reduced rate;

(d)the amount of the earnings, if any, recorded under paragraphs (b) and (c), above the current lower earnings limit, in respect of which primary Class 1 contributions were payable or, where section 6A of the Act and regulation 127 applies, were treated as having been paid, at the reduced rate;

(e)the amount of primary Class 1 contributions paid by the employee;

[F56(f)the amount of statutory maternity pay paid to the employee;

(g)the amount of statutory paternity pay paid to the employee; and

(h)the amount of statutory adoption pay paid to the employee;]

and shall enter the amounts under [F57paragraph (e)] under the appropriate category letter indicated by the [F58Inland Revenue].

(2) Where the employer is not required to give the employee a certificate in accordance with [F59regulation 67 of the PAYE Regulations], because no tax has been deducted from the employee’s [F60general earnings] during the year concerned [F61or the employee was not in the employer’s employment on the last day of the tax year,] [F62but the employee—

(a)has paid, or

(b)is treated, by virtue of section 6A of the Act, as having paid,

primary Class 1 contributions in that year, the employer shall nevertheless give the employee such a certificate showing the information referred to in sub-paragraph (1).]

Textual Amendments

F55Section 6A was inserted by paragraph 3 of Part I of Schedule 9 to the Welfare Reform Act.

F56Sch. 4 para. 9(1)(f)-(h) 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(3)(a)

F57Words in Sch. 4 para. 9(1) substituted (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(3)(b)

PART IIIU.K. PAYMENT AND RECOVERY OR EARNINGS-RELATED CONTRIBUTIONS, CLASS 1A CONTRIBUTIONS AND CLASS 1B CONTRIBUTIONS, ETC.

Payment of earnings-related contributions monthly by employerU.K.

10.—(1) Subject to [F63sub-paragraph (1A) and] paragraph 11 and 15(8), the employer shall pay the amount specified in sub-paragraph (2) to the [F64Inland Revenue] within 14 days [F65or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, within 17 days] of the end of every F66... tax month.

[F67(1A) This paragraph does not apply in respect of amounts of retrospective earnings.]

(2) The amount specified in this sub-paragraph is the total amount of earnings-related contributions due in respect of [F68general earnings] paid by the employer in that F69... tax month, other than amounts deductible under paragraph 7(2) which he did not deduct and amounts which he deducted under the Compensation of Employers Regulations and the Reimbursement Regulations.

(3) For the purposes of sub-paragraph (2), if two or more payments of [F70general earnings] fall to be aggregated, the employer shall be treated as having deducted from the last of those payments the amount of any earnings-related contributions deductible from those payments which he did not deduct from the earlier payments.

Textual Amendments

Payments of earnings-related contributions quarterly by employerU.K.

11.—(1) Subject to [F71sub-paragraph (1A) and] paragraph 15(8), the employer shall pay the amount specified in sub-paragraph (2) to the [F72Inland Revenue] within 14 days of the end of every F73... tax quarter [F74or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, within 17 days of the end of every tax quarter] where—

(a)the employer has reasonable grounds for believing that the condition specified in sub-paragraph (4) applies and chooses to pay the amount specified in sub-paragraph (2) quarterly; or

F75(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F76(1A) This paragraph does not apply in respect of amounts of retrospective earnings.]

(2) The amount specified in this sub-paragraph is the total amount of earnings-related contributions due in respect of [F77general earnings] paid by the employer in that F78... tax quarter, other than amounts deductible under paragraph 7(2) which he did not deduct and amounts which he deducted under the Compensation of Employers Regulations and Reimbursement Regulations.

(3) For the purposes of sub-paragraph (2), where two or more payments [F79of general earnings] fall to be aggregated, the employer shall be deemed to have deducted from the last of those payments the amount of any earnings-related contributions deductible from those payments which he did not deduct from the earlier payments.

[F80(4) The condition specified in this sub-paragraph is that for [F81tax months] falling within the current year, the average monthly amount found by the formula below will be less than £1500.

The formula is—

[F82(N + P + L + S) − (SP + CD)]

  • The expressions used in the formula have the following values.

    • N is the amount which would be payable to the [F83Inland Revenue] under the Social Security Contributions and Benefits Act 1992 and these Regulations but disregarding—

      (a)

      any amount of secondary Class 1 contributions in respect of which liability has been transferred to the employed earner by an election made jointly by the employed earner and the secondary contributor for the purpose of paragraph 3B(1) of Schedule 1 to the Act (transfer of liability to be borne by the earner); and

      (aa)

      [F84any amount payable in respect of retrospective earnings;]

      (c)

      F85...

    • [F86“P” is the amount which would be payable to HMRC under regulation 68 of the PAYE Regulations but disregarding any amount payable in respect of retrospective employment income (within the meaning of regulation 2 of those Regulations);]

    • L is the amount which would be payable to the [F83Inland Revenue] under regulation 39(1) of the Education (Student Loans) (Repayment) Regulations 2000 (payment of repayments deducted to the Inland Revenue) if the reduction referred to in paragraph (3) of that regulation F87...were disregarded.

    • S is the sum of the amounts which the employer would be liable to deduct, under section 559 of the Taxes Act and the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993, from payments made by him.

    • F88...

    • SP is the amount—

      (a)

      recoverable by the employer from [F89the Inland Revenue], or

      (b)

      deductible from amounts for which the employer would otherwise be accountable to [F89the Inland Revenue],

      in respect of payments to his employees by way of statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay.

    • CD is the amount which would be deducted by others from sums due to the employer, in his position as a sub-contractor, under section 559 of the Taxes Act.]

Textual Amendments

F80Sch. 4 para. 11(4) substituted (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(4)

[F90Payments of earnings-related contributions in respect of retrospective earningsU.K.

11A.—(1) This paragraph applies where there are retrospective earnings in respect of which contributions (whether primary or secondary contributions) are payable.

(2) The employer shall pay the contributions referred to in sub-paragraph (1) to HMRC within 14 days or, if payment is made in respect of the current year by an approved method of electronic communications, 17 days of the end of the tax month immediately following the tax month in which the relevant retrospective contributions regulations came into  force.]

Textual Amendments

Payment of earnings-related contributions by employer (further provisions)U.K.

12.—[F91(1) The Inland Revenue shall give a receipt to the employer for the total amount paid under paragraph [F9210, 11 or 11A] if so requested, but if a receipt is given for the total amount of earnings-related contributions and any tax paid at the same time, a separate receipt need not be given for earnings-related contributions.]

(2) Subject to sub-paragraph (3), if the employer has paid to the [F93Inland Revenue] on account of earnings-related contributions under paragraph [F9210, 11 or 11A] an amount which he was not liable to pay, or which has been refunded in accordance with regulation 2 of the Social Security (Refunds) (Repayment of Contractual Maternity Pay) Regulations 1990 (refunds of contributions)F94, the amounts which he is liable to pay subsequently in respect of other payments of [F95general earnings] made by him during the same year shall be reduced by the amount overpaid, so however that if there was a corresponding over-deduction from any payment of [F95general earnings] to an employee, this paragraph shall apply only in so far as the employer has reimbursed the employee for that over-deduction.

(3) Sub-paragraph (2) applies only if—

(a)the over-deduction occurred by reason of an error by the employer in good faith;

(b)the over-deduction occurred as a result of the employment in respect of which the payment on account of earnings-related contributions is made being or, as the case may be, becoming contracted-out employment; or

(c)a refund has been made under regulation 2 of the Social Security (Refunds) (Repayment of Contractual Maternity Pay) Regulations 1990.

Textual Amendments

Payment of Class 1B contributionsU.K.

13.—(1) A person who is liable to pay a Class 1B contribution (“the employer”), shall pay that Class 1B contribution to the [F96Inland Revenue] not later than 19th October [F97or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, not later than 22nd October] in the year immediately following the end of the year in respect of which that contribution is payable.

(2) If the employer has paid to the [F96Inland Revenue] under this paragraph an amount in respect of Class 1B contributions which he was not liable to pay, he shall be entitled to deduct the amount overpaid from any payment in respect of secondary earnings-related contributions which he is liable to pay subsequently to the [F96Inland Revenue] under paragraph 10 or 11 for any F98... tax period in the same year.

Textual Amendments

Employer failing to pay earnings-related contributionsU.K.

14.—(1) If within [F9917 days] of the end of any F100... tax period the employer has paid no amount of earnings-related contributions to the [F101Inland Revenue] under paragraph 10 or 11 for that F100... tax period and the [F101Inland Revenue] is unaware of the amount, if any, which the employer is liable so to pay, the [F101Inland Revenue] may give notice to the employer requiring him to render, within 14 days, a return in the prescribed form showing the amount of earnings-related contributions which the employer is liable to pay to the [F101Inland Revenue] under that paragraph in respect of the F100... tax period in question.

(2) Where a notice given by the [F101Inland Revenue] under sub-paragraph (1) extends to two or more consequent income tax periods, the provisions of this Schedule shall have effect as if those F100... tax periods were one F100... tax period.

(3) If the [F101Inland Revenue] is not satisfied that an amount of earnings-related contributions paid F102... under paragraph 10 or 11 for any F100... tax period is the full amount which the employer is liable to payF102..., the [F101Inland Revenue] may give a notice under sub-paragraph (1) despite the payment of that amount.

Textual Amendments

Specified amount of earnings-related contributions payable by the employerU.K.

15.—(1) If after [F10317 days] following the end of any F104... tax period the employer has paid no amount of earnings-related contributions to the [F105Inland Revenue] under paragraph 10 or 11 for that F104... tax period and there is reason to believe that the employer is liable to pay such contributions, the [F105Inland Revenue], upon consideration of the employer’s record of past payments, may to the best of [F106their judgment] specify the amount of earnings-related contributions which [F107they consider] the employer is liable to pay and give notice to him of that amount.

(2) If, on the expiration of the period of 7 days allowed in the notice, the specified amount of earnings-related contributions or any part thereof is unpaid, the amount so unpaid—

(a)shall be treated for the purposes of this Schedule as an amount of earnings-related contributions which the employer was liable to pay for that F104... tax period in accordance with paragraph 10 or 11; and

(b)may be certified by the [F105Inland Revenue].

(3) The provisions of sub-paragraph (2) shall not apply if, during the period allowed in the notice, the employer pays to the [F105Inland Revenue] the full amount of earnings-related contributions which the employer is liable to pay under paragraph 10 or 11 for that F104... tax period, or the employer satisfies the [F105Inland Revenue] that no amount of such contributions is due.

(4) The production of a certificate such as is mentioned in sub-paragraph (2) shall, until the contrary is established, be sufficient evidence that the employer is liable to pay to the [F105Inland Revenue] the amount shown in it; and any document purporting to be such a certificate as aforesaid shall be deemed to be such a certificate until the contrary is proved.

Paragraph 16 shall apply, with any necessary modifications, to the amount shown in the certificate.

(5) Where the employer has paid no amount of earnings-related contributions under paragraph 10 or 11 for any F104... tax periods, a notice may be given by the [F105Inland Revenue] under sub-paragraph (1) which extends to two or more consecutive F104... tax periods, and this Schedule shall have effect as if those F104... tax periods were the latest F104... tax period specified in the notice.

(6) A notice may be given by the [F105Inland Revenue] under sub-paragraph (1) notwithstanding that an amount of earnings-related contributions has been paid F108... by the employer under paragraph 10 or 11 for any F104... tax period, if, after seeking the employer’s explanation as to the amount of earnings-related contributions paid, the [F105Inland Revenue] is not satisfied that the amount so paid is the full amount which the employer is liable to pay F108... for that period, and this paragraph shall have effect accordingly, save that sub-paragraph (2) shall not apply if, during the period allowed in the notice, the employer satisfies the [F105Inland Revenue] that no further amount of earnings-related contributions is due for the relevant F104... tax period.

(7) Where, during the period allowed in a notice given by the [F105Inland Revenue] under sub-paragraph (1), the employer claims, but does not satisfy the [F105Inland Revenue], that the payment of earnings-related contributions made in respect of any F104... tax period specified in the notice is the full amount of earnings-related contributions he is liable to pay to the [F105Inland Revenue] for that period, the employer may require the [F105Inland Revenue] to inspect the employer’s documents and records as if the [F105Inland Revenue] had called upon the employer to produce those documents and records in accordance with paragraph 26(1) and the provisions of paragraph 26 shall apply in relation to that inspection, and the notice given by the [F105Inland Revenue] under sub-paragraph (1) shall be disregarded in relation to any subsequent time.

(8) Notwithstanding anything in this paragraph, if the employer pays any amount of earnings-related contributions certified by the [F105Inland Revenue] under it and that amount exceeds the amount which he would have been liable to pay in respect of that F104... tax period apart from this paragraph, he shall be entitled to set off such excess against any amount which he is liable to pay to the [F105Inland Revenue] under paragraph 10 or 11 for any subsequent F104... tax period.

(9) If, after the end of the year, the employer renders the return required by paragraph 22(1) and the total earnings-related contributions he has paid in respect of that year in accordance with this Schedule exceeds the total amount of such contributions due for that year, any excess not otherwise recovered by set-off shall be repaid.

Textual Amendments

Recovery of earnings-related contributions or Class 1B contributionsU.K.

16.—(1) The F109... Tax Acts and any regulations underF110 [F111section 684 of ITEPA 2003 (PAYE regulations)] relating to the recovery of tax shall apply to the recovery of—

(a)any amount of earnings-related contributions which an employer is liable to pay the [F112Inland Revenue] for any F109... tax period in accordance with paragraph 10 or 11 or which he is treated as liable to the [F112Inland Revenue] for any F109... tax period under paragraph 15; or

(b)any amount of Class 1B contributions which an employer is liable to pay to the [F112Inland Revenue] in respect of any year in accordance with paragraph 13(1),

as if each of those amounts had been charged to tax by way of an assessment on the employer [F113as employment income under ITEPA 2003].

(2) Sub-paragraph (1) is subject to the qualification that, in the application to any proceedings taken, by virtue of this paragraph, of any of the relevant provisions limiting the amount which is recoverable in those proceedings, there shall be disregarded any amount of tax which may, by virtue of sub-paragraphs (3) to (5), be included as part of the cause of action or matter of complaint in those proceedings.

(3) Proceedings may be brought for the recovery of the total amount of—

(a)earnings-related contributions which the employer is liable to pay to the [F112Inland Revenue] for any F109... tax period;

(b)Class 1B contributions which the employer is liable to pay to the [F112Inland Revenue] in respect of any year;

(c)a combination of those classes of contributions as specified in heads (a) and (b); or

(d)any of the contributions as specified in heads (a), (b), or (c) in addition to any tax which the employer is liable to pay to the [F112Inland Revenue] for any F109... tax period,

without specifying the respective amount of those contributions and of tax, or distinguishing the amounts which the employer is liable to pay in respect of each employee and without specifying the employees in question.

(4) For the purposes of—

(a)proceedings under section 66 of the Taxes Management Act 1970 F114 (including proceedings under that section as applied by the provisions of this paragraph);

(b)summary proceedings (including in Scotland proceedings in the sheriff court or in the sheriff’s small debt court),

the total amount of contributions, in addition to any tax which the employer is liable to pay to the [F112Inland Revenue] for any F109... tax period, referred to in sub-paragraph (3) shall, subject to sub-paragraph (2), be one cause of action or one matter of complaint.

(5) Nothing in sub-paragraph (3) or (4) shall prevent the bringing of separate proceedings for the recovery of each of the several amounts of—

(a)earnings-related contributions which the employer is liable to pay for any F109... tax period in respect of each of his several employees;

(b)Class 1B contributions which the employer is liable to pay in respect of any year in respect of each of his several employees; or

(c)tax which the employer is liable to pay for any F109... tax period in respect of each of his several employees.

Textual Amendments

F110Section 203 was amended by section 128 of, and paragraph 4 of Schedule 3 to, the Finance Act 1988 (c. 39), section 45(3) of the Finance Act 1989 (c. 26), paragraph 38 of Part II of Schedule 19 and item (23) of Part V of Schedule 26 to, the Finance Act 1994 (c. 9) and section 119 of the Finance Act 1998 (c. 36).

Interest on overdue earnings-related contributions or Class 1B contributionsU.K.

17.—(1) [F115Subject to [F116sub-paragraph (4A) and] paragraph 21], where, in relation to the year ended 5th April 1993 or any subsequent year, an employer has not—

(a)within 14 days [F117or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, 17 days] of the end of the year paid an earnings-related contribution which he is liable to pay in respect of that year; or

(b)paid a Class 1B contribution by 19th October [F118or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, not later than 22nd October] next following the year in respect of which it was due,

any contribution not so paid shall carry interest at the rate applicable under paragraph 6(3) of Schedule 1 to the Act from the reckonable date until payment.

(2) Interest payable under this paragraph shall be recoverable as if it were an earnings-related contribution or a Class 1B contribution, as the case may be, in respect of which an employer is liable under paragraph 10, 11, or 13 to pay to the [F119Inland Revenue].

(3) For the purposes of this paragraph—

(a)“employer” means, in relation to a Class 1B contribution, the person liable to pay such a contribution in accordance with section 10A of the ActF120;

(b)“the reckonable date” means, in relation to—

(i)an earnings-related contribution, the 14th day [F121or, if payment was made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, the 17th day] after the end of the year in respect of which it was due;

(ii)a Class 1B contribution, the 19th October [F122or, if payment was made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, the 22nd October] next following the year in respect of which it was due.

[F123(iii)a contribution payable in respect of retrospective earnings relating to a tax year which is closed at the time that the relevant retrospective contributions regulations come into force, the 14th day after the end of the tax month immediately following the tax month in which those regulations came into force.]

(4) A contribution to which sub-paragraph (1) applies shall carry interest from the reckonable date even if the date is a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882F124.

[F125(4A) Where an employer has not paid contributions in respect of retrospective earnings relating to a closed tax year by the date set out in paragraph 11A, any contribution not so paid shall carry interest at the rate applicable under paragraph 6(3) of Schedule 1 to the Act from the reckonable date until payment.]

[F126(5) A certificate of the Inland Revenue that, to the best of their knowledge and belief, any amount of interest payable under this paragraph has not been paid by an employer or employee is sufficient evidence that the amount mentioned in the certificate is unpaid and due to be paid, and any document purporting to be such a certificate shall be presumed to be a certificate until the contrary is proved.]

Textual Amendments

F120Section 10A was inserted by section 53 of the Social Security Act 1998 (c. 14).

F1241882 c. 61. Section 92 was amended by sections 3(1) and (3) and 4(4) of the Banking and Financial Dealings Act 1971 (c. 80).

[F127Application of paragraphs 16 and 17 in cases of wilful failure to payU.K.

17A.—(1) If regulation 86(1)(a) applies paragraphs 16 and 17 shall apply to the employed earner to the extent of the primary contribution which the secondary contributor wilfully failed to pay.

(2) For the purpose of sub-paragraph (1) any reference in paragraph 16 and 17 to an employer shall be construed as a reference to the employed earner.]

Textual Amendments

Payment of interest on repaid earnings-related contributions or Class 1B contributionsU.K.

18.—(1) Where an earnings-related contribution paid by an employer in respect of the year ended 5th April 1993 or any subsequent year not later than the year ended 5th April 1999 is repaid to him and that repayment is made after the relevant date, any such repaid contribution shall carry interest at the rate applicable under paragraph 6(3) of Schedule 1 to the Act from the relevant date until the order for the repayment is issued.

(2) For the purposes of sub-paragraph (1) “the relevant date” is—

(a)in the case of an earnings-related contribution overpaid more than 12 months after the end of the year in respect of which the payment was made, the last day of the year in which it was paid; and

(b)in any other case, the last day of the year after the year in respect of which the contribution in question was paid.

(3) Where an earnings-related contribution or a Class 1B contribution paid by an employer in respect of the year ended 5th April 2000 or any subsequent year is repaid to him and that repayment is made after the relevant date, any such repaid contribution shall carry interest at the rate applicable under paragraph 6(3) of Schedule 1 to the Act from the relevant date until the order for the repayment is issued.

(4) For the purpose of sub-paragraph (3) “the relevant date” is—

(a)in the case of—

(i)an earnings-related contribution, the 14th day after the end of the year in respect of which that contribution was paid; or

(ii)a Class 1B contribution, the 19th October next following the year in respect of which that contribution was paid; or

(b)the date on which the earnings-related contribution or Class 1B contribution was paid if that date is later than the date referred to in paragraph (a).

Repayment of interestU.K.

19.  Where a secondary contributor or a person liable to pay a Class 1B contribution has paid interest on an earnings-related contribution or a Class 1B contribution, that interest shall be repaid to him [F128if]—

(a)the interest paid is found not to have been due to be paid, although the contribution in respect of which it was paid was due to be paid;

(b)the earnings-related contribution or Class 1B contribution in respect of which interest was paid is returned or repaid to him in accordance with the provisions of regulation [F12952, 52A or 55].

Textual Amendments

F129Words in Sch. 4 para. 19(b) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 32(11)

Remission of interest for official errorU.K.

20.—(1) Where interest is payable in accordance with paragraph 17 it shall be remitted for the period commencing on the first relevant date and ending on the second relevant date in the circumstances specified in sub-paragraph (2).

(2) For the purposes of sub-paragraph (1), the circumstances are that the liability, or a greater liability, to pay interest in respect of an earnings-related contribution or a Class 1B contribution arises as the result of an official error being made.

(3) In this paragraph—

(a)“an official error” means a mistake made, or something omitted to be done, by an officer of the Board, where the employer or any person acting on his behalf has not caused, or materially contributed to, that mistake or omission;

(b)“the first relevant date” means the reckonable date as defined in paragraph 17(3) or, if later, the date on which the official error occurs;

(c)“the second relevant date” means the date 14 days after the date on which the official error has been rectified and the employer is advised of its rectification.

Application of paragraphs 10, 12, 16, 17, 18, 19 and 20U.K.

21.—(1) This paragraph applies where—

(a)secondary Class 1 contributions are payable in respect of [F130relevant employment income; and]

(b)an amount or proportion (as the case may be) of the liability of the secondary contributor to those contributions is transferred to the employed earner by an election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to the Act F131.

(2) Paragraphs 10, 12, 16, 17, 18, 19 and 20 shall apply to the employed earner to the extent of the liability transferred by the election and, to that extent, those paragraphs shall not apply to the employer.

(3) For the purposes of sub-paragraph (2)—

(a)any reference in paragraphs 10, 12, 16, 17, 18 and 20 to an employer; and

(b)the reference in paragraph 19 to a secondary contributor,

shall be construed as a reference to the employed earner to whom the liability is transferred by the election.

Textual Amendments

F130Words in Sch. 4 para. 21(1)(a) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 7(c)

F131Paragraph 3B was inserted into Schedule 1 by section 77(2) of the Child Support, Pensions and Social Security Act 2000.

Return by employer at end of yearU.K.

22.—(1) [F132Before 20th May following the end of the year the employer shall render to [F133HMRC] in such form as they may approve or prescribe], a return showing in respect of each employee, in respect of whom he was required at any time during the year to prepare or maintain a deductions working sheet in accordance with this Schedule—

(a)such particulars as [F133HMRC] may require for the identification of the employee,

(b)the year to which the return relates,

(c)in respect of each and under each of the category letters, the total amounts for the year shown under—

(i)each of [F134sub-paragraphs (i) to (v)] severally of paragraph 7(13)(b) (such amounts being rounded down to the next whole pound if not already whole pounds) in the case of paragraphs (i) to (iii)),

F135(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F136(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the total amount of any statutory maternity pay paid during the year; F137...

[F138(da)the total amount of statutory paternity pay paid during the year;

(db)the total amount of statutory adoption pay paid during the year; and]

(e)the total amounts he is entitled to deduct under regulation 5 of the Reimbursement Regulations.

(2) The return required by sub-paragraph (1) shall include a statement and declaration in the form approved or prescribed by [F133HMRC] containing a list of all deductions working sheets on which the employer was obliged to keep records in accordance with this Schedule in respect of that year, and shall also include a certificate showing—

(a)the total amount of earnings-related contributions payable by him in respect of each employee during that year;

(b)the total amount of earnings-related contributions payable in respect of all his employees during that year;

(c)in relation to any contracted-out employment the number notified by [F133HMRC] on the relevant contracting-out certificate as the employer’s number;

(d)in respect of statutory maternity pay paid during that year to all his employees, the total of amounts determined under regulation 3 of the Compensation of Employers Regulations and deducted by virtue of regulation 4 of those Regulations; F139...

[F140(da)in respect of statutory paternity pay paid during that year to all his employees the total of the amounts determined under regulation 5 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002;

(db)in respect of statutory adoption pay paid during that year to all his employees the total of the amounts determined under regulation 5 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002; and]

(e)the total amount deducted under regulation 8 of the Reimbursement Regulations in respect of all his qualifying employees in that year.

[F141(2A) Where a liability arises to pay contributions in respect of retrospective earnings relating to a closed tax year, the employer shall render a replacement return, or where necessary prepare one, in respect of the employee for that closed tax year before 20th May following the end of the year in which the relevant retrospective contributions regulations came into force, in accordance with paragraphs (a) to (c) of sub-paragraph (1), setting out the revised earnings and earnings-related contributions.

(2B) The return required by sub-paragraph (2A) shall include a statement and declaration in a form prescribed by HMRC containing a list of all deductions working sheets in accordance with paragraph 6(1A) of this Schedule in respect of that year, and shall also include a certificate showing—

(a)the total amount of earnings-related contributions originally payable (in accordance with sub-paragraph (2)(a)) in respect of each employee to whom sub-paragraph (2A) applies;

(b)the total amount of earnings-related contributions originally payable (in accordance with sub-paragraph (2)(b)) in respect of all employees to whom sub-paragraph (2A) applies;

(c)the total amount of revised earnings-related contributions payable in respect of each of those employees;

(d)the total amount of revised earnings-related contributions payable in respect of all those employees,

(e)the difference between the amount certified in paragraph (b) and paragraph (d) of this sub-paragraph in respect of all of those employees;

(f)in relation to any contracted-out employment the number notified by HMRC on the relevant contracting-out certificate as the employer’s number.]

(3) If paragraph 25 applies, the return required by sub-paragraph (1) and the certificate required by sub-paragraph (2) shall include the information specified in that paragraph.

(4) If the employer is a body corporate, [F142the declarations] and [F143the certificates] referred to in [F144sub-paragraphs (2) and (2B)] shall be signed by the secretary or by a director of the body corporate.

(5) If, within 14 days of the end of any year, an employer has failed to pay to the [F133HMRC] the total amount of earnings-related contributions which he is liable so to pay, the [F133HMRC] may prepare a certificate showing the amount of such contributions remaining unpaid for the year in question, excluding any amount deducted by the employer by virtue of the Compensation of Employers Regulations.

The provisions of paragraph 17 shall apply with any necessary modifications to the amount shown in that certificate.

(6) Notwithstanding sub-paragraphs (2) to (5), [F145the returns referred to in sub-paragraphs (1) and (2A)] may be made in such other form as [F133HMRC] and the employer approve, and in that case—

(a)sub-paragraphs (2) to (5) shall not apply; and

(b)the making of [F146the returns] shall be subject to such conditions as [F133HMRC] may direct as to the method of making it.

(7) Section 98A of the Taxes Management Act 1970 (penalties for late, fraudulent or negligent returns) F147 as modified by the provisions of paragraph 7 of Schedule 1 to the Act shall apply in relation to the requirement to make a return contained in sub-paragraph (1) [F148and (2A)].

Textual Amendments

F134Words in Sch. 4 para. 22(1)(c)(i) substituted (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(5)(a)(i)

F135Sch. 4 para. 22(1)(c)(ii) omitted (with effect in accordance with reg. 1(1) of the amending S.I.) by virtue of The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(5)(a)(ii)

F136Sch. 4 para. 22(1)(c)(iii) omitted (with effect in accordance with reg. 1(1) of the amending S.I.) by virtue of The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(5)(a)(ii)

F137Word in Sch. 4 para. 22(1)(d) omitted (with effect in accordance with reg. 1(1) of the amending S.I.) by virtue of The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(5)(b)

F138Sch. 4 para. 22(1)(da)-(db) 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(5)(b)

F139Word in Sch. 4 para. 22(2)(d) omitted (with effect in accordance with reg. 1(1) of the amending S.I.) by virtue of The Social Security (Contributions) (Amendment) Regulations 2003 (S.I. 2003/193), regs. 1(1), 16(5)(c)

F140Sch. 4 para. 22(2)(da)-(db) 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(5)(c)

F147Section 98A was inserted by section 165(1) of the Finance Act 1989 (c. 26).

[F149Additional return by employer at end of year where liability transferred to employed earner: elections under paragraph 3B(1) of Schedule 1 to the Act.]U.K.

23.—(1) This paragraph applies where—

(a)secondary Class 1 contributions are payable in respect of [F150relevant employment income; and]

(b)an amount or proportion (as the case may be) of the liability of the secondary contributor for those contributions is transferred to the employed earner by an election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to the Act.

(2) [F151Before 7th July after the end of the year the employer shall deliver to the Inland Revenue], in respect of each employed earner to whom any liability is transferred by the election, written particulars of the matters set out in sub-paragraph (3).

(3) The matters set out in this paragraph are—

(a)the amount of the contributions referred to in sub-paragraph (1)(a);

(b)the amount of the transferred liability; and

(c)the date on which payment of the amount of the transferred liability was made to the [F152Inland Revenue].

Textual Amendments

F149Sch. 4 para. 23 heading substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 7(d)

F150Words in Sch. 4 para. 23(1)(a) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 7(e)

Special return by employer at end of voyage periodU.K.

24.—(1) This paragraph applies where earnings-related contributions are assessed in accordance with regulation 120(4) or (5) (earnings periods for mariners and apportionment of earnings).

(2) Not later than 14 days after the end of the voyage period the employer shall render to the [F153Inland Revenue] in such form as the [F153Inland Revenue] may authorise a return in respect of each mariner showing—

(a)his name, discharge book number and national insurance number;

(b)the earnings periods and the amounts of [F154general earnings] apportioned to each such period in the voyage period;

(c)the appropriate category letter for each apportionment of [F154general earnings];

(d)the amounts of all the earnings-related contributions payable on each apportionment of [F154general earnings] otherwise than under paragraph 7(3);

(e)the amounts of primary Class 1 contributions included in the amounts shown under paragraph (d) for each apportionment of [F154general earnings];

(f)where the employment is contracted-out employment for any part of the voyage period—

(i)the amounts of that part of the contributions shown under paragraph (e) which were payable on earnings above the primary threshold, if primary Class 1 contributions were payable at the reduced rate, and

(ii)the number notified by the [F153Inland Revenue] on the relevant contracting-out certificate as the employer’s number;

(g)the total amount of any earnings in respect of which primary Class 1 contributions were payable, other than earnings from non-contracted-out employment in respect of which primary Class 1 contributions were payable at the reduced rate; and

(h)the total amounts he is entitled to deduct under regulation 5 or 6 of the Reimbursement Regulations in relation to each apportionment of [F154general earnings].

Textual Amendments

Return by employer of recovery under the Statutory Sick Pay Percentage Threshold OrderU.K.

25.—(1) This paragraph applies where an employer recovers any amount in respect of statutory sick pay payments made by him in any F155... tax month in accordance with article 2 of the Statutory Sick Pay Percentage Threshold Order 1995 F156 (right of employer to recover statutory sick pay).

(2) The information required pursuant to paragraph 23(3) to be included—

(a)in the return, is, in respect of each employee, the total amount of statutory sick pay the employer paid in each F155... tax month in respect of which he made that recovery; and

(b)in the certificate, is the total amount of statutory sick pay the employer recovered in the F155... tax year.

Textual Amendments

Inspection of employer’s recordsU.K.

26.—(1) Every employer, whenever requested to do so by an officer authorised by the [F157Inland 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 [F158general earnings] of his employees in respect of the years or F159... tax periods specified by the officer or to the amount of the earnings-related contributions payable in respect of those [F158general 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.

[F160(3A) Where records are maintained by computer, the employer shall provide the officer with all facilities necessary for obtaining information from them.]

(4) [F161The 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 [F162Inland Revenue], excluding any amount deducted by the employer by virtue of the Compensation of Employers Regulations for the years or F159... 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 [F162Inland 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 [F162Inland Revenue] in respect of the years or, as the case may be, F159... 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 [F163regulation 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) F164; 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 F165.

Textual Amendments

F160Sch. 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)

F164Section 10ZA was inserted, as respects Great Britain by section 75 of the Child Support, Pensions and Social Security Act 2000.

F165 See regulation 35(4) of S.I. 2000/2207.

Death of an employerU.K.

27.  If an employer dies, anything which he would have been liable to do under this Schedule shall be done by his personal representatives, or, in the case of an employer who paid [F166general earnings] on behalf of another person, by the person succeeding him or, if no person succeeds him, the person on whose behalf he paid [F166general earnings].

Textual Amendments

Succession to a business, etcU.K.

28.—(1) This paragraph applies where there has been a change in the employer from whom an employee receives [F166general earnings] in respect of his employment in any trade, business, concern or undertaking, or in connection with any property, or from whom an employee receives any annuity other than a pension.

(2) Where this paragraph applies, in relation to any matter arising after the change, the employer after the change shall be liable to do anything which the employer before the change would have been liable to do under this Schedule if the change had not taken place.

(3) Sub-paragraph (2) is subject to the qualification that the employer after the change shall not be liable for the payment of any earnings-related contributions which were deductible from emoluments paid to the employee before, unless they are also deductible from emoluments paid to [F167the employee after], the change took place, or of any corresponding employer’s earnings-related contributions.

Textual Amendments

Payments by chequeU.K.

29.—(1) Sub-paragraph (2) applies for the purposes of paragraphs 10, 11, 13, 15, 17 and 18.

(2) If any payment to the [F168Inland Revenue] is made by cheque, and the cheque is paid on its first presentation to the banker on whom it is drawn, the payment shall be treated as made on the day on which the cheque was received by the [F168Inland Revenue], and “pay”, “paid”, “unpaid” and “overpaid” shall be construed accordingly.

Textual Amendments

PART IVU.K. ASSESSMENT AND DIRECT COLLECTION

Provisions for direct paymentU.K.

30.  In cases of employed earner’s employment, where the employer does not fulfil the conditions prescribed in regulation 145(1)(b) as to residence or presence in Great Britain or Northern Ireland or is a person who, by reason of any international treaty to which the United Kingdom is a party or of any international convention binding on the United Kingdom, is exempt from the provisions of the Act or is a person against whom, for a similar reason, the provisions of the Act are not enforceable, the provisions of paragraph 31 shall apply to the employee, unless the employer, being a person entitled to pay the primary contributions due in respect of the earnings from the said employment, is willing to pay those contributions.

Direct collection involving deductions working sheetsU.K.

31.—(1) In any case falling within paragraph 30, [F169HMRC] may issue a deductions working sheet to the employee (and, if no such working sheet has been issued, the employee shall obtain one from [F169HMRC]), and sub-paragraphs (2) to (8) shall apply.

(2) The employee to whom a deductions working sheet has been issued under sub-paragraph (1) shall record on that working sheet his name, national insurance number and category letter indicated by [F169HMRC], and whenever, in respect of an employment such as is specified in paragraph 30, the employee receives any [F170general earnings] during the year for which the deductions working sheet was issued, he shall also record on that working sheet the amount of the [F170earnings], the date on which he received them, and the earnings-related contributions payable by him in respect of those [F170earnings ].

(3) Not later than the time for the payment of income tax, if any, the employee shall pay to [F169HMRC] the amount of the earnings-related contributions payable by the employee in respect of the [F171general earnings] which have been received by him and for which the income tax is or would have been payable.

(4) If, by the time specified in sub-paragraph (3), the employee has paid no amount of earnings-related contributions to [F169HMRC] in respect of the [F172general earnings] mentioned in that sub-paragraph, and [F169HMRC] is unaware of the amount, if any, which the employee is liable so to pay, or if an amount has been paid but [F169HMRC] is not satisfied that it is the full amount which the employee is liable to pay to him in respect of those [F172earnings], sub-paragraph (5) applies.

(5) If this sub-paragraph applies, [F169HMRC] may give notice to the employee requiring him to render, within the time limited in the notice, a return in the prescribed form containing particulars of all [F173general earnings] received by him during the period specified in the notice and such other particulars affecting the calculations of the earnings-related contributions payable in respect of the [F173earnings] in question as may be specified in the notice, and in such a case the provisions of—

(a)paragraph 14 regarding the ascertaining and certifying by [F169HMRC] of earnings-related contributions payable by an employer, and

(b)paragraph 16 regarding the recovery of those contributions.

shall apply with the necessary modifications for the purposes of ascertaining, certifying and recovering the earnings-related contributions payable by the employee.

(6) If the employee ceases to receive [F174general earnings] falling within sub-paragraph (2), he shall immediately render to [F175[F169HMRC], in such form as they may prescribe] , a return showing such particulars as they may require for the identification of the employee, the year to which the return relates, the appropriate category letter, the last date on which he received any such [F174earnings], the total of those [F174earnings] and the earnings-related contributions payable from the beginning of the year to that date.

(7) [F176Before 20th May following] the end of the year, the employee shall (unless sub-paragraph (6) has applied) render to [F177[F169HMRC], in such form as they may prescribe], a return showing such particulars as they may require for the identification of the employee, the year to which the return relates, the total of the [F178general earnings] and earnings-related contributions payable during the year, together with the appropriate category letter, and the provisions of paragraph 22(5) regarding the certification and recovery of earnings-related contributions remaining unpaid by an employer for any year shall apply in the case of any earnings-related contributions remaining unpaid by the employee.

[F179(7A) Where a liability arises to pay contributions in respect of retrospective earnings relating to a closed tax year, the employer shall render a replacement return for the closed tax year before 20th May following the end of the year in which the relevant retrospective contributions regulations came into force in accordance with sub-paragraph (7), setting out the revised earnings and earnings-related contributions.

(7B) Where sub-paragraph (7A) applies, the employer shall amend the relevant deductions working sheet or where necessary prepare one in accordance with sub-paragraph (2)]

(8) The employee shall retain deductions working sheets issued under sub-paragraph (1) for not less than three years after the end of the year to which they relate.

(9) Section 98A of the Taxes Management Act 1970 (special penalties for certain returns) as modified by the provisions of paragraph 7 to Schedule 1 to the Act, shall apply in relation to the requirement to make a return contained in sub-paragraphs [F180(6), (7) and (7A)].

Textual Amendments

Yn ôl i’r brig

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