The Income Tax (Pay As You Earn) (Amendment No. 4) Regulations 2014

Amendment of the Income Tax (Pay As You Earn) Regulations 2003

4.  After regulation 14B (determination of code in respect of high income child benefit charge) insert—

“Determination of code in respect of recovery of tax credit debts

14C.— (1) HMRC may determine a code, if and to the extent that the payee(1) does not object, to effect the recovery of all or part of a tax credit debt.

(2) Sums deducted or to be deducted as a result of a determination made in reliance on paragraph (1) are to be treated, for the purposes of employers’ obligations and enforcement, in the same way as amounts of tax which the employer is liable to pay under provisions of these Regulations (so, for example, regulation 84 applies for the purposes of recovery).

(3) Sums deducted as a result of a determination made in reliance on paragraph (1) are to be treated for the purposes of interest on the tax credit debt as having been paid on the first day of the tax year in respect of which the determination is made.

(4) In this regulation “tax credit debt” means child tax credit or working tax credit that the payee is liable to repay to the Commissioners under or by virtue of an enactment.

Recovery of debts: overall limit

14D.— (1) This regulation applies where HMRC determines a code under, or by reference to, one or both of the following provisions—

(a) regulation 14A(1) (determination of code in respect of recovery of relevant debts)(2); or

(b) regulation 14C(1) (determination of code in respect of recovery of tax credit debts).

(2) Column 2 of Table 1A sets out the total amount of debt that may be recovered from an employee (“E”) under a code to which this regulation applies, by reference to the expected amount of PAYE income(3) of E in the tax year for which that code is determined.

TABLE 1A

TOTAL AMOUNT OF DEBT THAT MAY BE RECOVERED

1 The expected amount of PAYE income of E in the tax year for which the code is determined	2 The total amount of debt that may be recovered from E in that tax year
Less than £30,000	No more than £3,000
£30,000 or more but less than £40,000	No more than £5,000
£40,000 or more but less than £50,000	No more than £7,000
£50,000 or more but less than £60,000	No more than £9,000
£60,000 or more but less than £70,000	No more than £11,000
£70,000 or more but less than £80,000	No more than £13,000
£80,000 or more but less than £90,000	No more than £15,000
£90,000 or more	No more than £17,000.

(3) In this regulation the “total amount of debt” means the sum recovered or to be recovered by virtue of a code determined under, or by reference to, one or both of regulations 14A(1) or 14C(1).”.

(1)

“Payee” is defined in regulation 2(1) of the principal Regulations.

(2)

Regulation 14A was inserted by S.I. 2011/1584.

(3)

“PAYE income” is defined in regulation 2(1) of the principal Regulations.