The Income Tax (Pay As You Earn) Regulations 2003

Quarterly tax periods

70.—(1) This regulation applies, so that the tax period is a tax quarter, if an employer—

(a) has reasonable grounds for believing that the average monthly amount will be less than £1,500, and

(b) chooses to pay tax quarterly.

(2) “The average monthly amount” is the average, for tax months falling within the current tax year, of the amounts found by the formula—

(3) In paragraph (2)—

• P is the amount which would be payable to the Inland Revenue under regulation 68 disregarding any WTC adjustment;

• N is the amount which would be payable to the Inland Revenue under the SSCBA and the SSC Regulations 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 purposes of paragraph 3B(1) of Schedule 1 to the SSCBA (transfer of liability to be borne by earner)(1); and

  (b)

  any WTC adjustment;

• L is the amount which would be payable to the Inland Revenue under regulation 39(1) of the Student Loans Regulations (payment of repayments deducted to the Inland Revenue) disregarding—

  (a)

  the reduction referred to in paragraph (3) of that regulation, and

  (b)

  any WTC adjustment;

• S is the amount which would be payable by the employer to the Inland Revenue under sections 559 and 559A of ICTA(2) (deduction on account of tax etc from payments to certain sub-contractors) and regulation 8 of the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993(3), disregarding any WTC adjustment;

• C is the amount which the employer would be required to pay to employees by way of tax credit under the WTC Regulations;

• SP is the amount which would be payable by the employer to employees by way of statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay under the SSCBA; and

• CD is—

  (a)

  if the employer is a company, the amount which others would deduct from payments to it, in its position as a sub-contractor, under section 559 of ICTA (deduction on account of tax etc from payments to certain sub-contractors);

  (b)

  in any other case, nil.

(4) In this regulation—

“employed earner” has the same meaning as in the SSCBA;

“SSCBA” means the Social Security Contributions and Benefits Act 1992(4) or, in Northern Ireland, the Social Security Contribution and Benefits (Northern Ireland) Act 1992(5);

“SSC Regulations” means the Social Security (Contributions) Regulations 2001(6);

“Student Loans Regulations” means the Education (Student Loans) (Repayment) Regulations 2000(7) or, in Northern Ireland, the Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2000(8);

“WTC adjustment” means an adjustment to the amount in question under regulation 7(2) of the WTC Regulations (funding of payment of working tax credit);

“WTC Regulations” means the Working Tax Credit (Payment by Employers) Regulations 2002(9).

(1)

Paragraph 3B was inserted in Schedule 1 to the Social Security Contributions and Benefits Act 1992 (c. 4) by section 77(2) of the Child Support, Pensions and Social Security Act 2000 (c. 19), and in Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) by section 81(2) of the Child Support, Pensions and Social Security Act 2000.

(2)

Section 559 was amended by section 139 of, and paragraph 1 of Schedule 27 to, the Finance Act 1995 (c. 4), section 55(2) of the Finance Act 1998 (c. 36), Part 3(1) of Schedule 40 to the Finance Act 2002 (c. 23), paragraph 58 of Schedule 6 to ITEPA and by S.I. 1989/2405 (N.I. 19); section 559A was inserted by section 40(1) of the Finance Act 2002.

(3)

S.I. 1993/743.

(4)

1992 c. 4.

(5)

1992 c. 7.

(6)

S.I. 2001/1004.

(7)

S.I. 2000/944.

(8)

S.R. (N.I.) 2000 No. 121.

(9)

S.I. 2002/2172.