SCHEDULES

SCHEDULE 58Recovery of debts under PAYE regulations

Section 110

PAYE regulations

1

Section 684 of ITEPA 2003 (PAYE regulations) is amended as follows.

2

In subsection (1), omit “for Her Majesty's Revenue and Customs”.

3

1

Subsection (2) is amended as follows.

2

For “PAYE regulations may, in particular, include” substitute “ The provision that may be made in PAYE regulations includes ”.

3

In the list of provisions, in item 1, in paragraph (a), omit “for Her Majesty's Revenue and Customs”.

4

In item 2, for “or remaining unpaid (or treated as overpaid or remaining unpaid)” substitute “ (or treated as overpaid) on account of, or any amounts other than relevant debts remaining unpaid (or treated as remaining unpaid) ”.

5

After item 2 insert—

2A

Provision—

a

for deductions to be made in respect of relevant debts of a payee,

b

as to the circumstances in which such deductions may be made, and

c

where such deductions are made, as to the date on which the relevant debts are to be treated as paid.

6

In item 3, for “income tax has been and is” substitute “ amounts have been and are ”.

4

After subsection (3) insert—

3A

PAYE regulations under item 2A in the above list may not make provision enabling deductions totalling more than £2,000 to be made from a payee's income for a tax year without the payee's consent.

3B

The Treasury may by order amend the amount specified in subsection (3A).

5

In paragraph (a) of subsection (7A), after “tax” insert “ or other amounts ”.

6

After that subsection insert—

7AA

In this section “relevant debt”, in relation to a payee, means—

a

a sum payable by the payee to the Commissioners under or by virtue of an enactment, other than an excluded debt, and

b

a sum payable by the payee to the Commissioners under a contract settlement.

7AB

For the purposes of subsection (7AA)—

a

child tax credit or working tax credit that the payee is liable to repay is an excluded debt, and

b

if the payee is an employer, any amount that the payee is required to deduct from the PAYE income of employees for a tax year is an excluded debt until the tax year has ended.

7

In subsection (7C), before the definition of “payer” insert—

the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

contract settlement” means an agreement made in connection with the liability of the payee or another person to make a payment to the Commissioners under or by virtue of an enactment.

Consequential provision

8

In section 29(5) of the Tax Credits Act 2002 (recovery of overpayments)—

a

for “tax” substitute “ income tax ”, and

b

insert at the end “that is not a relevant debt (within the meaning of section 684 of the Income Tax (Earnings and Pensions) Act 2003)”.

9

1

Part 11 of ITEPA 2003 (pay as you earn) is amended as follows.

2

In section 682(1) (scope of Part), insert at the end “ and includes provision in respect of the deduction of certain other amounts from, and the repayment of certain other amounts with, PAYE income ”.

3

In section 685 (tax tables)—

a

in subsection (1), omit “for Her Majesty's Revenue and Customs”, and

b

in subsection (2)(b), for “or 2” substitute “ , 2 or 2A ”.

10

1

The Treasury may by order make provision—

a

amending or repealing provisions of Part 11 of ITEPA 2003,

b

amending, repealing or revoking provisions of enactments or instruments that refer to provisions of that Part, and

c

amending, repealing or revoking provisions of enactments or instruments that apply, or confer power to apply, PAYE regulations or otherwise refer to such regulations.

2

An order under this paragraph may only make provision to the extent that it is appropriate in consequence of, or in connection with, the amendments made by this Schedule.

3

An order under this paragraph may include transitional provision and savings.

4

An order under this paragraph is to be made by statutory instrument.

5

A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.