SCHEDULE 4F30Provisions derived from the Income Tax Acts and the Income Tax (Pay As You Earn) Regulations 2003
PART I GENERAL
Interpretation1
F381
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);
F130“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 F307...
“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 F272... F271...
“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 F327... 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;
F328...
F191...
“Inland Revenue” means any officer of the Board of Inland Revenue;
“mariner” has the same meaning as in regulation 115;
F215“non-Real Time Information employer” means an employer other than one within sub-paragraph (4);
F215“Real Time Information employer” has the meaning given in sub-paragraph (4);
F216...
“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).
F2144
The following are Real Time Information employers for the purposes of this Schedule—
a
an employer who has entered into an agreement with HMRC to comply with the provisions of this Schedule which are expressed as relating to Real Time Information employers;
b
an employer within sub-paragraph (5);
F243c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; and
d
on and after 6th October 2013, all employers.
5
An employer is within this paragraph if the employer has been given a general or specific direction by the Commissioners for Her Majesty's Revenue and Customs before 6th October 2013 to deliver to HMRC returns under paragraph 21A of this Schedule (real time returns of information about payments of F329... earnings).
Multiple employersF392
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.
Intermediate employers3
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 F330F33... 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
a
the immediate employer shall be notified by the principal employer of the amount of earnings-related contributions which may be deducted when F35those 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 F36those earnings will be paid.
4
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.
Employer’s earnings-related contributions4
F111Intermediaries4A
1
Where any payment of F331F112... 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
d
paragraph 7(11),
2
For the purposes of this paragraph, a payment of F331F112... 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.
F32Continuation of proceedings etc.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.
PART II DEDUCTION OF EARNINGS-RELATED CONTRIBUTIONS
Deduction of earnings-related contributions6
1
Every employer, on making during any year to any employee any payment of F332F68... earnings in respect of which earnings-related contributions are payable, or are treated as payableF333...—
a
shall, if he has not already done so, prepare F273... a deductions working sheet for that employee, and
b
may deduct earnings-related contributions in accordance with this Schedule.
F1311A
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 F114relevant employment income) F3 if the election provides for the collection of the amount in respect of which liability is transferred.
Calculation of deduction7
1
Subject to sub-paragraph (2), on making any payment of F334F40... earnings to the employee, the employer may deduct from those F334F40... earnings the amount of the earnings-related contributions based on those F334F40... earningsF117... which the employee is liable to pay under section 6(4) of the Act F124(the “section 6(4)(a) amount”).
F3761A
F3881B
In sub-paragraph (1A) “chain payment”, “deemed direct earnings” and “deemed employer” have the meanings given in regulations 14(2)(a), 14(3) and 20(5) respectively of the Social Security Contributions (Intermediaries) Regulations 2000.
2
Where two or more payments of F334F40... earnings fall to be aggregated, the employer may deduct the amount of the earnings-related contributions based on those F334F40... 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.
F1203
If the employer–
a
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 F334F40... earnings made by the employer to that employee during F25the same year and, where the case falls within paragraph (b) F57or sub-paragraph 4(a) or (f).
This sub-paragraph is subject to sub-paragraphs (4) and (5).
F1323A
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 F334... 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
F357c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
5
For the purposes of sub-paragraphs (3), F133(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 F118in a case falling within paragraph (a) of any of those sub-paragraphs F134except 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.
F26This is subject to the following qualification.
F275A
Where a payment—
a
falls within sub-paragraph (4)(e) F78or (f),
b
comprises a beneficial interest in F29securities, 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 F123section 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.
F1228
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
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 F71securities,
ii
iii
any gain on which the ex-employee is chargeable to tax by virtue of F73section 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 F121section 6(4)(a) amount.
F7410
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F75...
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 F76securities referred to in of sub-paragraph 9(b)(i) and (ii); or
b
the F76securities 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 F76securities 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 F334F40... 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,
F218ii
earnings which exceed the current lower earnings limit but do not exceed the current primary threshold,
F217iii
earnings which exceed the current primary threshold but do not exceed the F358current upper earnings limit,
F359iiia
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F15iv
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;
F318viia
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ix
any statutory shared parental payF385; and
x
any statutory parental bereavement pay.
F360...
F13c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Where 2 or more payments of F334F40... 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 F334F40... earnings he shall record under the name of the employee to whom he pays the F334F40... earnings—
a
the date of payment;
c
any allowable F77pension contributions;
F113Records where liability transferred from secondary contributor to employed earner: relevant employment income8
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.
Certificate of contributions paid9
1
Where the employer is required to give the employee a certificate in accordance with F59regulation 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
c
F363ca
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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;
F16f
the amount of statutory maternity pay paid to the employee;
i
the amount of statutory shared parental pay paid to the employee;F384; and
j
the amount of statutory parental bereavement pay paid to the employee;
2
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).
F2203
In sub-paragraph (2), “relevant payments” has the meaning given in the PAYE Regulations.
PART III PAYMENT AND RECOVERY OR EARNINGS-RELATED CONTRIBUTIONS, CLASS 1A CONTRIBUTIONS AND CLASS 1B CONTRIBUTIONS, ETC.
Payment of earnings-related contributions monthly by employer10
1
Subject to F135sub-paragraph (1A) and paragraph 11 and 15(8), the employer shall pay the amount specified in sub-paragraph (2) to the F79Inland Revenue within 14 days F80or, 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 F81... tax month.
F1361A
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 F335F42... earnings paid by the employer in that F43... tax month, F221(and, where required, reported under paragraph 21A or 21D) other than amounts deductible under paragraph 7(2) which he did not deduct and amounts which he deducted under the Compensation of Employers RegulationsF223....
3
For the purposes of sub-paragraph (2), if two or more payments of F335F82... 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.
F2223A
The amount specified in sub-paragraph (2) must be adjusted to take account of errors corrected under paragraph 21E(5), other than in cases where paragraph 21E(4) appliesF241, or failures rectified under paragraph 21EA(2).
F2964
Where the amount specified in sub-paragraph (2) has been adjusted to take account of an error as provided for in sub-paragraph (3A) and the value of the adjustment is a negative amount, that amount is treated as having been paid to HMRC—
a
17 days after the end of the tax month in which the correction is made if payment is made using an approved method of electronic communications, and
b
14 days after the end of the tax month in which the correction is made, in any other case.
Payments of earnings-related contributions quarterly by employer11
1
Subject to F137sub-paragraph (1A) and paragraph 15(8), the employer shall pay the amount specified in sub-paragraph (2) to the F83Inland Revenue within 14 days of the end of every F84... tax quarter F85or, 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
F86b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1381A
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 F336F44... earnings paid by the employer in that F45... tax quarter, F225(and, where required, reported under paragraph 21A or 21D)
other than amounts deductible under paragraph 7(2) which he did not deduct and amounts which he deducted under the Compensation of Employers RegulationsF228....
3
For the purposes of sub-paragraph (2), where two or more payments F87of F336... 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.
F2243A
The amount specified in sub-paragraph (2) must be adjusted to take account of errors corrected under paragraph 21E(5), other than in cases where paragraph 21E(4) appliesF242, or failures rectified under paragraph 21EA(2).
F2973B
Where the amount specified in sub-paragraph (2) has been adjusted to take account of an error as provided for in sub-paragraph (3A) and the value of the adjustment is a negative amount, that amount is treated as having been paid to HMRC—
a
17 days after the end of the tax quarter in which the correction is made if payment is made using an approved method of electronic communications, and
b
14 days after the end of the tax quarter in which the correction is made, in any other case.
F124
The condition specified in this sub-paragraph is that for F46tax months falling within the current year, the average monthly amount found by the formula below will be less than £1500.
The formula is—
F125(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 F47Inland 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
F139any amount payable in respect of retrospective earnings;
- c
F128...
- a
F140“P” is the amount which would be payable to HMRC under regulation F226 67G or 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 F47Inland Revenue under
F227regulation 54(1) of the Education (Student Loans) (Repayment) Regulations 2009 (payment of repayments deducted to HMRC)
if the reduction referred to in paragraph (3) of that regulation F126...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.
F127...
SP is the amount—
- a
recoverable by the employer from F48the Inland Revenue, or
- b
deductible from amounts for which the employer would otherwise be accountable to F48the Inland Revenue,
in respect of payments to his employees by way of F308... statutory maternity pay, F208F322statutory paternity payF314, statutory shared parental payF380, statutory adoption pay and statutory parental bereavement pay.
- a
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.
F212Payments to and recoveries from HMRC for each tax period by Real Time Information employers: returns under paragraph 21E(6) F245or 21EA(3)11ZA
1
This paragraph applies if, during any tax period, an employer makes a return under paragraph 21E(6) (returns under paragraph 21A and 21D: amendments) other than by virtue of paragraph 21E(4)F244, or paragraph 21EA(3) (failure to make a return under paragraph 21A or 21D of Schedule 4).
2
The amount specified in paragraph 10(2) or, as the case may be, 11(2) for the final tax period in the year covered by the return is to be adjusted to take account of the information in the return.
3
If the value of the adjustment required by paragraph (2) is a negative amount, the employer may recover that amount—
a
by setting it off against the amount the employer is liable to pay under paragraph 10(2) or, as the case may be, 11(2) for the tax period the return is made in; or
b
from the Commissioners for Her Majesty's Revenue and Customs.
F2983A
Where sub-paragraph (3) applies the negative amount is treated as having been paid to HMRC—
a
17 days after the end of the final tax period in the year covered by the return where payment is made using an approved method of electronic communication, and
b
14 days after the end of the final tax period in the year covered by the return in any other case.
4
But paragraph (3) does not apply in relation to primary Class 1 contributions in a case where those contributions were deducted in error and the excess deduction has not been refunded to the employee.
F129Payments of earnings-related contributions in respect of retrospective earnings11A
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.
Payment of earnings-related contributions by employer (further provisions)12
F881
The Inland Revenue shall give a receipt to the employer for the total amount paid under paragraph F14110, 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 F89Inland Revenue on account of earnings-related contributions under paragraph F14110, 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)F6, the amounts which he is liable to pay subsequently in respect of other payments of F337F90... 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 F337F90... 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;
F365b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
a refund has been made under regulation 2 of the Social Security (Refunds) (Repayment of Contractual Maternity Pay) Regulations 1990.
Payment of Class 1B contributions13
1
A person who is liable to pay a Class 1B contribution (“the employer”), shall pay that Class 1B contribution to the F91Inland Revenue not later than 19th October F92or, 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 F91Inland 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 F91Inland Revenue under paragraph 10 or 11 for any F93... tax period in the same year.
Employer failing to pay earnings-related contributions14
1
If within F4917 days of the end of any F51... tax period F229a non-Real Time Information employer
has paid no amount of earnings-related contributions to the F50Inland Revenue under paragraph 10 or 11 for that F51... tax period and the F50Inland Revenue is unaware of the amount, if any, which the employer is liable so to pay, the F50Inland 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 F50Inland Revenue under that paragraph in respect of the F51... tax period in question.
2
3
If the F50Inland Revenue is not satisfied that an amount of earnings-related contributions paid F94... under paragraph 10 or 11 for any F51... tax period is the full amount which the employer is liable to payF94..., the F50Inland Revenue may give a notice under sub-paragraph (1) despite the payment of that amount.
Specified amount of earnings-related contributions payable by the employer15
1
If after F6117 days following the end of any F52... tax period the employer has paid no amount of earnings-related contributions to F164HMRC under paragraph 10 or 11 for that F52... tax period and there is reason to believe that the employer is liable to pay such contributions, F164HMRC, upon consideration of the employer’s record of past payments F165whether of earnings-related contributions or of combined amounts, may to the best of F62their judgment specify the amount of earnings-related contributions F166or of a combined amount which F63they consider the employer is liable to pay and give notice to him of that amount.
F1601A
For the purposes of this paragraph “combined amount” is an amount which includes earnings-related contributions due under these regulations and one or more of the following—
a
tax due under the PAYE Regulations;
b
amounts due under the Income Tax (Construction Industry Scheme) Regulations 2005;
c
payments of repayments of student loans due under the F231Education (Student Loans) (Repayment) Regulations 2009.
F2301B
In arriving at an amount under paragraph (1), HMRC may also take into account any returns made by the employer under this Schedule in the tax period in question or earlier tax periods.
2
If, on the expiration of the period of 7 days allowed in the notice, the specified amount F167... or any part thereof is unpaid, the amount so unpaid—
a
b
may be certified by F169HMRC.
3
The provisions of sub-paragraph (2) shall not apply if, during the period allowed in the notice, the employer pays to F170HMRC the full amount of earnings-related contributions which the employer is liable to pay under paragraph 10 or 11 for that F52... tax period, or the employer satisfies F170HMRC 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 F171HMRC 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 F52... tax periods, a notice may be given by F172HMRC under sub-paragraph (1) which extends to two or more consecutive F52... tax periods, and this Schedule shall have effect as if those F52... tax periods were the latest F52... tax period specified in the notice.
6
A notice may be given by F173HMRC under sub-paragraph (1) notwithstanding that an amount of earnings-related contributions has been paid F64... by the employer under paragraph 10 or 11 for any F52... tax period, if, after seeking the employer’s explanation as to the amount of earnings-related contributions paid, F173HMRC is not satisfied that the amount so paid is the full amount which the employer is liable to pay F64... 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 F173HMRC that no further amount of earnings-related contributions is due for the relevant F52... tax period.
7
Where, during the period allowed in a notice given by F161HMRC under sub-paragraph (1), the employer claims, but does not satisfy F161HMRC, that the payment F162... made in respect of any F52... tax period specified in the notice is F163or includes the full amount of earnings-related contributions he is liable to pay to F161HMRC for that period, the employer may require F161HMRC to inspect the employer’s documents and records as if F161HMRC had called upon the employer to produce those documents and records in accordance with F192Schedule 36 to the Finance Act 2008 (information and inspection powers) and the provisions of paragraph 26A shall apply in relation to that inspection, and the notice given by F161HMRC 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 F174HMRC under it F175whether separately or as part of a combined amount and that amount exceeds the amount which he would have been liable to pay in respect of that F52... 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 F174HMRC under paragraph 10 or 11 for any subsequent F52... 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.
Recovery of earnings-related contributions or Class 1B contributions16
1
The F53... Tax Acts and any regulations underF7F65section 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 F182HMRC for any F53... tax period in accordance with paragraph 10 or 11 or which he is treated as liable to F182HMRCF178whether separately or as part of a combined amount for any F53... tax period under paragraph 15; or
b
any amount of Class 1B contributions which an employer is liable to pay to the F182HMRC 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 F66as 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 F179other component of a combined amount 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
b
Class 1B contributions which the employer is liable to pay to F186HMRC in respect of any year;
c
a combination of those classes of contributions as specified in heads (a) and (b); or
d
without specifying the respective amount of those contributions and of F181other component of a combined amount, 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 F8 (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),
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 F53... 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; F183...
c
tax which the employer is liable to pay for any F53... tax period in respect of each of his several employees.
F177d
amounts due under the Income Tax (Construction Industry Scheme) Regulations 2005; or
e
payments of repayments of student loans due under the F232Education (Student Loans) (Repayment) Regulations 2009.
F1766
For the purposes of this paragraph “combined amount” has the meaning given in paragraph 15(1A).
Interest on overdue earnings-related contributions or Class 1B contributions17
1
F96Subject to F142sub-paragraph (4A) and paragraph 21, where, in relation to the year ended 5th April 1993 or any subsequent year, an employer has not—
F299a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
paid a Class 1B contribution by 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 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 F187HMRC.
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 ActF9;
b
“the reckonable date” means, in relation to—
F300i
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
a Class 1B contribution, the 19th October F98or, 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.
F143iii
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 1882F10.
F1444A
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.
F675
A certificate of F188HMRC 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.
F1896
HMRC may prepare a certificate certifying the total amount of interest payable in respect of the whole or any component of a combined amount without specifying what component of the combined amount the interest relates to.
Sub-paragraph (5) shall apply, with any necessary modifications, to the certificate.
7
For the purposes of this paragraph “combined amount” has the meaning given in paragraph 15(1A).
F31Application of paragraphs 16 and 17 in cases of wilful failure to pay17A
1
If regulation 86(1)(a) applies paragraphs 16 and 17F301, and section 101 of the Finance Act 2009, in respect of an earnings-related contribution, 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.
Payment of interest on repaid earnings-related contributions or Class 1B contributions18
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 F302... 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—
F303i
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 F304... Class 1B contribution was paid if that date is later than the date referred to in paragraph (a).
Repayment of interest19
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 F145if—
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 F9552, 52A or 55.
Remission of interest for official error20
1
Where interest is payable in accordance with paragraph 17F305, or section 101 of the Finance Act 2009 in relation to any earnings-related contribution, 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 2021
1
This paragraph applies where—
a
secondary Class 1 contributions are payable in respect of F115relevant 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 ActF11.
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.
F211Real time returns of information about payments of F338... earnings21A
1
F267Subject to F274sub-paragraph (1A), on or before making any payment of F339... earnings to an employee a Real Time Information employer must deliver to HMRC the information specified in Schedule 4A (real time returns) in accordance with this paragraph F246unless—
a
the employer is not required to maintain a deductions working sheet for any employees, or
b
an employee’s earnings are below the lower earnings limit and the employer is required to make a return under regulation 67B(1), regulation 67D(3), regulation 67E(6) or regulation 67EA(3) of the PAYE Regulations.
F2751A
But a Real Time Information employer—
a
which for the tax year 2014-15 meets Conditions A and B, or
b
which for the tax year 2015-16 meets Conditions A and C,
1B
Condition A is that at 5th April 2014 the employer is one to whom HMRC has issued an employer’s PAYE reference.
F2751C
Condition B is that at 6th April 2014 the Real Time Information employer employs no more than 9 employees.
1D
Condition C is that at 6th April 2015 the Real Time Information employer employs no more than 9 employees.
1E
In this paragraph “employer’s PAYE reference” means—
a
the combination of letters, numbers, or both, used by HMRC to identify an employer for the purposes of the PAYE Regulations, and
b
the number which identifies the employer’s HMRC office.
2
The information must be included in a return.
3
4
If payments of F339... earnings are made to more than one employee at the same time but the employer operates more than one payroll, the employer must make a return in respect of each payroll.
5
The return is to be made using an approved method of electronic communications and regulation 90N(2) (mandatory use of electronic communications) applies as if the return was a paragraph 22 return within the meaning given by regulation 90M (paragraph 22 return and specified payments).
F2476
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2477
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Schedule 24 to the Finance Act 2007 (penalties for errors), as that Schedule applies to income tax returns, shall apply in relation to the requirement to make a return contained in sub-paragraph (2).
F238Employees in respect of whom employer is not required to maintain a deductions worksheet21AA
1
This paragraph applies if an employer makes a payment of F340... earnings to an employee in respect of whom the employer is not required to maintain a deductions working sheet.
2
The employer need not deliver the information required by paragraph 21A in respect of that employee on or before making the payment.
3
The employer must deliver that information no later than the end of the period of 7 days starting with the day following the day on which the payment is made.
Employees paid in specified circumstances21AB
1
This paragraph applies if—
a
an employer makes a payment of F341... earnings to an employee, and
b
all of the circumstances in sub-paragraph (2) apply.
2
The circumstances are that—
a
the payment includes an amount of F341... earnings which is for work undertaken by the employee on—
i
the day the payment is made, or
ii
provided that the payment is made before the employee leaves the place of work at the end of the employee’s period of work, the day before the payment is made,
b
in respect of the work mentioned in paragraph (a), it was not reasonably practicable for the employer to calculate the payment due before the completion of the work, and
c
it is not reasonably practicable for the employer to deliver the information required by paragraph 21A on or before making the payment.
3
The employer need not deliver the information required by paragraph 21A on or before making the payment.
4
The employer must deliver that information no later than the end of the period of 7 days starting with the day following the day on which the payment is made.
Paragraphs 21AA and 21AB: supplementary21AC
Benefits and expenses – returns under regulations 85 to 87 of the PAYE Regulations21AD
1
This paragraph applies if an employer makes a payment of F343... earnings to an employee which, for the purposes of tax, falls to be included in a return under—
a
regulations 85 and 86 of the PAYE Regulations (employers: annual return of other earnings (Forms P11D and P9D) – information which must be provided for each employee), or
b
regulations 85 and 87 of the PAYE Regulations (employers: annual return of other earnings (Forms P11D and P9D) – information which must also be provided for benefits code employees) or would fall to be so included if the employee’s employment was subject to the benefits code for the purposes of regulation 85 of the PAYE Regulations.
2
If the employer is unable to comply with the requirement in paragraph 21A(1) to deliver the information required by that paragraph on or before making the payment, the employer must instead deliver the information as soon as reasonably practicable after the payment is made and in any event no later than 14 days after the end of the tax month in which the payment is made.
F211Modification of the requirements of paragraph 21A: notional payments21B
1
2
If the employer is unable to comply with the requirement in paragraph 21A(1) to deliver the information required by that paragraph on or before making the payment, the employer must instead deliver the information as soon as reasonably practicable after the payment is made and in any event no later than—
a
the time at which the employer delivers the information required by regulation 67B of the PAYE Regulations (real time returns of information about relevant payments) in respect of the payment;
F249b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; or
c
14 days after the end of the tax month the payment is made in,
whichever is earliest.
F211Relationship between paragraph 21A and aggregation of earnings21C
1
Where an employee's earnings are aggregated, a Real Time Information employer or, as the case may be, Real Time Information employers must make such arrangements as are necessary to ensure that the information specified in paragraph (2) in respect of all the aggregated earnings is included in the information given in respect of one of the employee's employments only.
2
The information specified in this paragraph is the information specified in paragraphs 7 and 10(b) and (d) of Schedule 4A (real time returns).
F239Notifications of payments of F345... earnings to and by providers of certain electronic payment methods21CA
1
A Real Time Information employer who makes a payment of F345... earnings using an approved method of electronic communications which falls to be included in a return under paragraph 21A must—
a
generate a reference and include it in that return,
b
notify the service provider that the payment is a payment of F345... earnings, and
c
generate a sub-reference in respect of the payment of F345... earnings and notify the service provider of that sub-reference.
2
A service provider who receives a notification under paragraph (1)(b) must notify HMRC of the information it holds that is required for generating a reference in relation to the payment of F345... earnings.
3
In sub-paragraphs (1) and (2), “service provider” means the provider of the approved method of electronic communications by which the payment is made.
4
For the purposes of sub-paragraphs (1) and (3), an “approved method of electronic communications” is any method of electronic communications which has been approved for the purposes of regulation 90H (mandatory electronic payment).
5
Any direction given under regulation 67CA of the PAYE Regulations (notification of relevant payments to and by providers of certain electronic payment methods) applies for the purposes of the obligations in this paragraph as if it referred to payments of F345 ... earnings.
F211Exceptions to paragraph 21A21D
1
This paragraph applies to—
a
an individual who is a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications;
b
a partnership, if all the partners fall within sub-paragraph (a);
c
a company, if all the directors and the company secretary fall within sub-paragraph (a);
d
a care and support employer.
F252e
an employer to whom a direction has been given under sub-paragraph (12).
F280But this is subject to sub-paragraph (2B).
2
A Real Time Information employer to whom this paragraph applies may proceed in accordance with this paragraph instead of paragraph 21A.
F2502A
Before 6th April 2014, a Real Time Information employer to whom this paragraph applies may proceed as if the employer were a non-Real Time Information employer and accordingly the provisions of this Schedule apply to such an employer.
F2762B
This paragraph does not apply if a Real Time Information employer within sub-paragraph (1) makes a return using an approved method of electronic communications.
3
F253On and after 6th April 2014, the Real Time Information employer must deliver to HMRC the information specified in Schedule 4A in respect of each employee to whom a payment of F346... earnings is made in a tax F277quarter unless the employer is not required to maintain a deductions working sheet for any employees and, for the purposes of this paragraph, references in Schedule 4A to a payment of F346 ... earnings shall be read as if they were references to all the payments made to the employee in the tax F277quarter.
4
The information must be included in a return in such a form as HMRC may approve or prescribe.
5
The return required under sub-paragraph (4) must be delivered within 14 days after the end of the tax F278quarter the return relates to.
6
F2547
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2548
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Schedule 24 to the Finance Act 2007, as that Schedule applies to income tax returns, shall apply in relation to the requirement to make a return contained in sub-paragraph (4).
10
In sub-paragraph (1)(c), “company” means a body corporate or unincorporated association but does not include a partnership.
11
In sub-paragraph (1)(d), “care and support employer” means an individual (“the employer”) who employs a person to provide domestic or personal services at or from the employer's home where—
a
the services are provided to the employer or a member of the employer's family;
b
the recipient of the services has a physical or mental disability, or is elderly or infirm; and
c
it is the employer who delivers the return (and not some other person on the employer's behalf).
F25112
Where the Commissioners for Her Majesty’s Revenue and Customs are satisfied that—
a
it is not reasonably practicable for an employer to make a return using an approved method of electronic communications, and
b
it is the employer who delivers the return (and not some other person on the employer’s behalf),
they may make a direction specifying that the employer is not required to make a return using an approved method of electronic communications.
F211Returns under paragraphs 21A and 21D: amendments21E
1
2
3
4
This sub-paragraph applies where retrospective earnings increase the total amount of the F347 ... earnings paid to the employee for any tax year in which the employer was a Real Time Information employer.
F2835
When the employer becomes aware of an inaccuracy in a return under paragraph 21A or 21D, the employer must provide the correct information in the next return for the tax year in question.
6
But if the information given has not been corrected before 20th April following the end of the tax year in question, the employer must make a return under this sub-paragraph.
7
A return under sub-paragraph (6)—
a
must include the following—
i
the information specified in paragraphs F2562 to 7 and 10 to 12 of Schedule 4A,
F257ii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
F392if the return relates to the tax year 2017-18 or an earlier tax year, the value of the adjustment, if any, to the information given under each of the paragraphs of Schedule 4A referred to in sub-paragraph (2) in the final return under paragraph 21A or 21D containing information in respect of the employee in the tax year in question,
F391iiia
if the return relates to the tax year 2020-21 or a subsequent tax year, the amount which should have been given under one or more of the paragraphs of Schedule 4A referred to in sub-paragraph (2) in the final return under paragraph 21A or 21D containing information in respect of the employee in the tax year in question,
iiib
if the return relates to the tax year 2018-19 or 2019-20—
aa
the value of the adjustment to the information given under, or
bb
the amount which should have been given under,
one or more of the paragraphs of Schedule 4A referred to in sub-paragraph (2) in the final return under paragraph 21A or 21D containing information in respect of the employee in the tax year in question,
F394iv
if the inaccuracy relates to the information which was or which should have been given under paragraph 7 or 10(b) or (d) of Schedule 4A, the information specified in paragraph 6 of that Schedule,
v
if the inaccuracy relates to the information which was or which should have been given under paragraph 10(d) of Schedule 4A and the correct information decreases the amount reported under that paragraph, an indication of whether the employer has refunded the primary Class 1 contributions paid in error to the employee, and
vi
if the inaccuracy relates to the information which was or which should have been given under paragraph 16 of Schedule 4A, the information specified in paragraph 17 of that Schedule if it has not already been provided;
b
must be made as soon as reasonably practicable after the F285employer becomes aware of the inaccuracy; and
c
must be made using an approved method of electronic communications F258and regulation 90N(2) (mandatory use of electronic communications) applies as if the return was a paragraph 22 return within the meaning given by regulation 90M (paragraph 22 return and specified payments).
8
In the application of sub-paragraphs (6) and (7) to cases within sub-paragraph (3), if no information was given in any returns under paragraph 21A or 21D in respect of the employee in the tax year, the value of any adjustments required F393by sub-paragraph (7)(a)(iii) or (iiib) must be calculated as if there was a final return containing information for the employee in the year and the figure requiring adjustment was zero.
9
Sub-paragraph (7)(c) does not apply if the employer is one to whom paragraph 21D applies but in those circumstances the return must be in such a form as HMRC may approve or prescribe.
F240Failure to make a return under paragraph 21A or 21D21EA
1
This paragraph applies where an employer does not make a return required by paragraph 21A (real time returns of information about payments of F348... earnings) or 21D (exceptions to paragraph 21A).
2
The employer must provide the information in the next return made under paragraph 21A or 21D for the tax year in question.
3
But if the information has not been provided before 20th April following the end of the tax year in question, the employer must submit a return under this sub-paragraphF268....
4
A return under sub-paragraph (3) must—
a
include the information specified in Schedule 4A,
b
be made as soon as reasonably practicable after the discovery of the failure to make the return, and
c
be made using an approved method of electronic communications and regulation 90N(2) (mandatory use of electronic communications) applies as if the return were a paragraph 22 return within the meaning given by regulation 90M (paragraph 22 return and specified payments).
5
Sub-paragraph (4)(c) does not apply if the employer is one to whom paragraph 21D applies but in those circumstances the return must be in such a form as HMRC may approve or prescribe.
6
F269If a return under sub-paragraph (3) is not made before 20th May following the tax year in question section 98A of TMA 1970 (special penalties in the case of certain returns) applies to F270that returnF309, but this sub-paragraph does not apply to a return in respect of the tax year 2014-15 or a subsequent tax year.
F211Additional information about payments21F
1
A Real Time Information employer must inform HMRC of each of the amounts specified in Schedule 4B (additional information about payments) for each tax period unless sub-paragraph (4) or (5) applies.
2
The information must be given in a return.
3
The return must be delivered within 14 days after the end of the tax period.
4
This sub-paragraph applies if—
a
all of the amounts are zero; and
b
the employer has not made a return under sub-paragraph (2) in the tax year.
5
This paragraph applies if none of the amounts has changed in the tax period.
6
If an employer makes an error in a return under this paragraph, the employer must provide the correct information in the first return made under sub-paragraph (2) after the discovery of the error.
7
But if the information given has not been corrected before 20th April following the end of the year in question, the employer must provide the correct information for the year in question in a return under this sub-paragraph.
F2597A
A Real Time Information employer may send to HMRC a notification (included within a return under this paragraph or otherwise) if—
a
for a tax period, the employer was not required to make any returns in accordance with paragraph 21A or 21D because no payments of F349... earnings were made during the tax periods, or
b
the employer has sent the final return under paragraph 21A or 21D that the employer expects to make—
i
in the circumstances described in paragraph 5 of Schedule A1 to the PAYE Regulations (real time returns); or
ii
for the year.
8
A return under sub-paragraph (2) or (7) F260and a notification under paragraph (7A)—
a
must state—
i
the year to which the return relates,
ii
the employer's HMRC office number,
iii
the employer's PAYE reference, F261...
iv
the employer's accounts office referenceF262, and;
v
if the notification is under sub-paragraph (7A)(b)(i), include the date of cessation;
b
is to be made using an approved method of electronic communications.
F2649
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
For the purposes of sub-paragraph (8)(b), regulation 90N(2) (mandatory use of electronic communications) applies as if the return was a paragraph 22 return within the meaning given by regulation 90M (paragraph 22 return and specified payments).
11
The requirement to use an approved method of electronic communications does not apply if the employer is one to whom paragraph 21D (exceptions to paragraph 21A) applies but in those circumstances the return must be in such a form as HMRC may approve or prescribe.
12
Schedule 24 to the Finance Act 2007 (penalties for errors), as that Schedule applies to income tax returns, shall apply in relation to the requirement to make a return contained in sub-paragraph (2) or (7).
F306Penalty: failure to comply with paragraph 21A or 21D21G
1
Where a Real Time Information employer fails to deliver a return in accordance with paragraph 21A (real time returns of information about payments of F350... earnings) to paragraph 21AB (employees paid in specific circumstances), paragraph 21AD (benefits and expenses – returns under the PAYE Regulations), paragraph 21B (modification of the requirements of paragraph 21A: notional payments) or paragraph 21D (exceptions to paragraph 21A), Schedule 55 to the Finance Act 2009 (amount of penalty: real time information for PAYE) and regulations 67I to 67K of the PAYE Regulations (penalties) apply in relation that failure as if—
a
the return under paragraph 21A (real time returns of information about payments of F350... earnings) or paragraph 21D (exceptions to paragraph 21A), as the case may be, were a return falling within item 4 of the Table in paragraph 1 of Schedule 55, and
b
references to the PAYE Regulations were references to these Regulations,
but this is subject to F366sub-paragraphs (2) and (2A).
2
Where a Real Time Information employer (P) is liable to a penalty in consequence of a failure to deliver a return (“the tax return”) under regulation 67B (real time returns of information about relevant payments) or regulation 67D (exceptions to regulation 67B) of the PAYE Regulations, P shall not also be liable to a penalty in respect of any failure in relation to an associated return under paragraph 21A (real time returns of information about payments of F350... earnings) or 21D (exceptions to paragraph 21A).
F3672A
Sub-paragraph (2) does not apply to a penalty imposed under paragraph 6D of Schedule 55 to the Finance Act 2009 (amount of penalty: real time information for PAYE).
3
A tax return and a return under paragraph 21A or 21D are “associated” if the return under paragraph 21A or 21D is required to be delivered at the same time as the tax return.
Return by employer at end of year22
F233A1
This F263paragraph applies to—
a
non-Real Time Information employers;
b
Real Time Information employers in relation to years in which they were, for the whole of the year, non-Real Time information employers; and
c
Real Time Information employers to whom HMRC has given a notice requiring a return under regulation 73 of the PAYE Regulations (annual return of relevant payments liable to deduction of tax (Forms P35 and P14) in respect of a tax year.
1
F54Before 20th May following the end of the year the employer shall render to F146HMRC 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 F146HMRC 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
F19ii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F20iii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
the total amount of any statutory maternity pay paid during the year; F22...
F324daa
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
dc
the total amount of statutory shared parental pay paid during the yearF377; and
dd
the total amount of statutory parental bereavement pay paid during the year.
F234e
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
The return required by sub-paragraph (1) shall include a statement and declaration in the form approved or prescribed by F146HMRC 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;
F369c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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; F23...
F24da
F326daa
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
db
dc
in respect of statutory shared parental pay paid during the year to all his employees the total of the amounts determined under regulation 5 (deductions from payments to the Commissioners) of the Statutory Shared Parental Pay (Administration) Regulations 2014F381; and
dd
in respect of statutory parental bereavement pay paid during the year to all his employees the total of the amounts determined under regulation 5 of the Statutory Parental Bereavement Pay (Administration) Regulations 2020.
F234e
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1572A
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 employeesF370.
F371f
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3103
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
5
If, within 14 days of the end of any year, an employer has failed to pay to the F146HMRC the total amount of earnings-related contributions which he is liable so to pay, the F146HMRC 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), F151the returns referred to in sub-paragraphs (1) and (2A) may be made in such other form as F146HMRC and the employer approve, and in that case—
a
sub-paragraphs (2) to (5) shall not apply; and
7
F158Section 98A of the Taxes Management Act 1970 (special penalties in the case of certain returns) and Schedule 24 to the Finance Act 2007 (penalties for errors) as that Schedule applies to income tax returns 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) F147and (2A).
F351Notification by employer at end of year that an agreement described in paragraph 3A(2) or an election under paragraph 3B(1) of Schedule 1 to the Act has been operated in relation to a Secondary Class 1 contribution23
1
An employer must notify HMRC on or before 6th July if a relevant agreement or relevant election has been operated in relation to a Secondary Class 1 contribution payable in respect of the relevant employment income of a person (“the earner”) in the year immediately preceding the year in which that day falls.
2
A relevant agreement has been operated in relation to the contribution described in sub-paragraph (1) if the employer has recovered the whole or any part of it pursuant to an agreement described in paragraph 3A(2) of Schedule 1 to the Act.
3
A relevant election has been operated in relation to the contribution described in sub-paragraph (1) if the liability for the whole or any part of it has been transferred to the earner pursuant to an election under paragraph 3B of that Schedule.
Special return by employer at end of voyage period24
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 F55Inland Revenue in such form as the F55Inland Revenue may authorise a return in respect of each mariner showing—
a
his name, discharge book number and national insurance number;
b
d
e
f
F374the total amount of any earnings in respect of which primary Class 1 contributions were payable.
F372g
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F235h
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Return by employer of recovery under the Statutory Sick Pay Percentage Threshold OrderF31125
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F190Retention by employer of contribution and election records26
1
An employer must keep and preserve all contribution records which are not required to be sent to HMRC by other provisions in these Regulations for not less than—
a
three years after the end of the tax year to which they relate; or
b
for documents or records relating to information about the amounts of Class 1A and Class 1B contributions, three years after the end of the year in which a contribution became payable.
2
The duty under paragraph (1) may be discharged by preserving the contribution records in any form or by any means.
3
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, the records which the secondary contributor is obliged by paragraph 8 to maintain shall be retained by the secondary contributor throughout the period for which the election is in force and for six years after the end of that period.
4
In this paragraph “contribution records” means wages sheets, deductions working sheets F286... and other documents or records relating to—
a
the calculation of payment of earnings to the employer's employees or the amount of the earnings-related contributions payable for those earnings;
b
the amount of any Class 1A contributions or Class 1B contributions payable by the employer; and
c
any information about the amounts of Class 1A and Class 1B contributions.
F2874A
Sub-paragraph (4B) applies in relation to an employer who makes deductions, or applies for a repayment, under section 4 of the National Insurance Contributions Act 2014 on account of an employment allowance for which the employer qualifies for a tax year (or who intends to do so).
4B
So far as they are not otherwise covered by sub-paragraph (4), “contribution records” includes any documents or records relating to—
a
the employer's qualification for the employment allowance, or
b
the calculation of any amount that has been, or could be, deducted or repaid under section 4 of the National Insurance Contributions Act 2014 on account of the employment allowance.
5
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); 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.
Certificate of employer's liability to pay contributions after inspection of documents26A
1
An officer of Revenue and Customs may, by reference to the information obtained from an inspection of the documents and records produced under Schedule 36 to the Finance Act 2008 (information and inspection powers), and on the occasion of each inspection, prepare a certificate showing—
a
the amount of earnings-related contributions which it appears that the employer is liable to pay to HMRC, excluding any amount deducted by the employer by virtue of the Compensation of Employers Regulations for the years or tax periods covered by the inspection; or
b
the amount of any Class 1B contributions which it appears that the employer is liable to pay to HMRC 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 HMRC or, to the best of the officer's knowledge and belief, to any other person to whom it might lawfully be paid.
2
The production of a certificate mentioned in sub-paragraph (1) shall, unless the contrary is proved, be sufficient evidence that the employer is liable to pay to HMRC in respect of the years or, as the case may be, 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.
3
The provisions of paragraph 16 shall apply with any necessary modifications to the amount shown in such a certificate.
4
For the purposes of this paragraph “employer” has the meaning given by paragraph 26(5).
Death of an employer27
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 F353F99... earnings on behalf of another person, by the person succeeding him or, if no person succeeds him, the person on whose behalf he paid F353F99 ... earnings.
Succession to a business, etc28
1
This paragraph applies where there has been a change in the employer from whom an employee receives F354F99... 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 F100the employee after, the change took place, or of any corresponding employer’s earnings-related contributions.
Payments by cheque29
1
Sub-paragraph (2) applies for the purposes of paragraphs 10, 11, 13, 15, 17 and 18.
2
If any payment to the F101Inland 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 F101Inland Revenue, and “pay”, “paid”, “unpaid” and “overpaid” shall be construed accordingly.
F156PART 3ADEBTS OF MANAGED SERVICE COMPANIES
Sch. 4 Pt. 3A inserted (6.8.2007) by The Social Security (Contributions) (Amendment No. 5) Regulations 2007 (S.I. 2007/2068), regs. 1, 2
Interpretation of this Part29A
1
In this Part of this Schedule—
“HM Revenue and Customs” means Her Majesty’s Revenue and Customs;
“lower amount” means the amount mentioned in paragraph 29C(5);
“managed service company” has the meaning given by section 61B of ITEPA;
“paragraph (b) associate” means a person who—
- a
is within section 688A(2)(d), and
- b
is within that provision by virtue of a connection with a person who is within section 688A(2)(b);
- a
“paragraph (c) associate” means a person who—
- a
is within section 688A(2)(d), and
- b
is within that provision by virtue of a connection with a person who is within section 688A(2)(c);
- a
“qualifying period” means a tax period beginning on or after 6th August 2007;
“relevant contributions debt” means a debt specified in paragraph 29B;
“specified amount” means the amount mentioned in paragraph 29C(1)(b);
“transfer notice” means the notice mentioned in paragraph 29C(4);
“transferee” means the person mentioned in paragraph 29C(4).
2
In this Part of this Schedule references to section 688A, however expressed, are references to section 688A of ITEPA.
Relevant contributions debts of managed service companies29B
1
A managed service company has a relevant contributions debt if—
a
a managed service company must pay an amount of contributions for a qualifying period, and
b
one of conditions A to E is met.
2
Condition A is met if—
a
a decision has been made in accordance with section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 that an amount of Class 1 National Insurance contributions is due in respect of a qualifying period, and
b
any part of the amount has not been paid within 14 days from the date on which the decision became final and conclusive.
3
Condition B is met if—
a
an employer delivers a return under paragraph 22(1) (return by employer at end of year) for the tax year 2007-08, or any later tax year, showing an amount of total contributions deducted by the employer for that tax year,
b
HM Revenue and Customs prepare a certificate under paragraph 22(5) (certificate that contributions specified in return under paragraph 22(1) remain unpaid) showing how much of that amount remains unpaid, and
c
any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the certificate is prepared.
4
Condition C is met if—
a
HM Revenue and Customs prepare a certificate under paragraph 14(1) (employer failing to pay earnings-related contributions) showing an amount of contributions which the employer is liable to pay for a qualifying period, and
b
any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the certificate is prepared.
5
Condition D is met if—
a
HM Revenue and Customs serve notice on an employer under paragraph 15(1) (specified amount of earnings-related contributions payable by the employer) requiring payment of the amount of Class 1 contributions which they consider the employer is liable to pay, and
b
any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the notice is prepared.
6
Condition E is met if—
a
HM Revenue and Customs prepare a certificate under F193paragraph 26A (certificate of employer's liability to pay contributions after inspection of documents) showing an amount of contributions which it appears that the employer is liable to pay for a qualifying period,
b
HM Revenue and Customs make a written demand for payment of that amount of contributions, and
c
any part of that amount remains unpaid at the end of a period of 14 days beginning with the date on which the written demand for payment is made.
Transfer of debt of managed service company29C
1
This paragraph applies if—
a
a managed service company has a relevant contributions debt, and
b
an officer of Revenue and Customs is of the opinion that the relevant contributions debt or a part of the relevant contributions debt (the “specified amount”) is irrecoverable from the managed service company within a reasonable period.
2
HM Revenue and Customs may make a direction authorising the recovery of the specified amount from the persons specified in section 688A(2) (managed service companies: recovery from other persons).
3
Upon the making of a direction under sub-paragraph (2), the persons specified in section 688A(2) become jointly and severally liable for the relevant contributions debt, but subject to what follows.
4
HM Revenue and Customs may not recover the specified amount from any person in accordance with a direction made under sub-paragraph (2) until they have served a notice (a “transfer notice”) on the person in question (the “transferee”).
5
If an officer of Revenue and Customs is of the opinion that it is appropriate to do so, HM Revenue and Customs may accept an amount less than the specified amount (the “lower amount”) from a transferee; but this acceptance shall not prejudice the recovery of the specified amount from any other transferee.
6
HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, if the relevant contributions debt is incurred before 6th January 2008.
7
HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, unless an officer of Revenue and Customs certifies that, in his opinion, it is impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates.
8
In determining, for the purposes of sub-paragraph (7), whether it is impracticable to recover the specified amount from the persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates the officer of Revenue and Customs may have regard to all managed service companies in relation to which a person is a person mentioned in paragraph (a) or (b) of section 688A(2) or a paragraph (b) associate.
9
In determining which of the persons mentioned in section 688A(2)(c) and which of the paragraph (c) associates are to be served with transfer notices and the amount of those notices, HM Revenue and Customs must have regard to the degree and extent to which those persons are persons who (directly or indirectly) have encouraged or been actively involved in the provision by the managed service company of the services of the individual mentioned in that provision.
Time limits for issue of transfer notices29D
1
A transfer notice must be served before the end of the period specified in this paragraph.
2
Sub-paragraphs (3) to (7) apply if the transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2) or on a paragraph (b) associate.
3
In a case in which condition A in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which the decision became final and conclusive.
4
In a case in which condition B in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs received the return delivered under paragraph 22.
5
In a case in which condition C in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs prepare the certificate under paragraph 14(1).
6
In a case in which condition D in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs serve notice to the employer under paragraph 15(1).
7
In a case in which condition E in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs carry out the inspection of the employer’s contribution records under F194Schedule 36 to the Finance Act 2008.
8
If the transfer notice is served on a person mentioned in paragraph (c) of section 688A(2), or on a paragraph (c) associate, the transfer notice must be served before the end of a period of three months beginning with the date on which the officer of Revenue and Customs certifies the matters specified in paragraph 29C(7).
Contents of transfer notice29E
1
A transfer notice must contain the following information—
a
the name of the managed service company to which the relevant contributions debt relates;
b
the address of the managed service company to which the relevant contributions debt relates;
c
the amount of the relevant contributions debt;
d
the tax periods to which the relevant contributions debt relates;
e
if the tax periods to which the relevant contributions debt relates are comprised in more than one tax year, the apportionment of the relevant contributions debt among those tax years;
f
which of the conditions A to E specified in paragraph 29B is met;
g
the transferee’s name;
h
the transferee’s address;
j
whether the transferee is a person mentioned in paragraph (a), (b) or (c) of section 688A, a paragraph (b) associate or a paragraph (c) associate;
k
if the transferee is a person mentioned in paragraph (c) of section 688A or a paragraph (c) associate—
i
the date on which the officer of Revenue and Customs certified the matters specified in paragraph 29C(7), and
ii
the names of the persons from whom it has been impracticable to recover the specified amount;
l
the specified amount;
m
the tax periods to which the specified amount relates;
n
if the tax periods to which the specified amount relates are comprised in more than one tax year, the apportionment of the specified amount among those tax years;
o
the address to which payment must be sent;
p
the address to which an appeal must be sent.
2
The transfer notice may specify the lower amount if HM Revenue and Customs are prepared to accept the lower amount from the transferee.
3
The transfer notice must also contain a statement, made by the officer of Revenue and Customs serving the notice, that in his opinion the specified amount is irrecoverable from the managed service company within a reasonable period.
Payment of the specified amount29F
1
If a transfer notice is served, the transferee must pay the specified amount to HM Revenue and Customs at the address specified in the transfer notice.
2
The transferee must pay the specified amount within 30 days beginning with the date on which the transfer notice is served (the “specified period”).
3
If a transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2), or on a paragraph (b) associate, the specified amount carries interest from the reckonable date until the date on which payment is made.
4
If a transfer notice is served on a person mentioned in paragraph (c) of section 688A(2), or on a paragraph (c) associate, the specified amount carries interest from the day following the expiry of the specified period until the date on which payment is made.
F1955
For the purposes of sub-paragraph (3) “the reckonable date” has the meaning given by paragraph 17(3)(b)(i).
Appeals29G
1
A transferee may appeal against the transfer notice.
2
A notice of appeal must—
a
be given to HM Revenue and Customs at the address specified in the transfer notice within 30 days beginning with the date on which the transfer notice was served, and
b
specify the grounds of the appeal.
3
The grounds of appeal are any of the following—
a
that the relevant contributions debt (or part of the relevant contributions debt) is not due from the managed service company to HM Revenue and Customs;
b
that the specified amount does not relate to a company which is a managed service company;
c
that the specified amount is not irrecoverable from the managed service company within a reasonable period;
d
that the transferee is not a person mentioned in section 688A(2);
e
that the transferee was not a person mentioned in section 688A(2) during the tax periods to which the specified amount relates;
f
that the transferee was not a person mentioned in section 688A(2) during some part of the tax periods to which the specified amount relates;
g
that the transfer notice was not served before the end of the period specified in paragraph 29D;
h
that the transfer notice does not satisfy the requirements specified in paragraph 29E;
j
in the case of a transferee mentioned in section 688A(2)(c) or of a paragraph (c) associate, that it is not impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) or from paragraph (b) associates;
k
in the case of a transferee mentioned in section 688A(2)(c) or of a paragraph (c) associate, that the amount specified in the transfer notice does not have regard to the degree and extent to which the transferee is a person who (directly or indirectly) has encouraged or been actively involved in the provision by the managed service company of the services of the individual mentioned in that provision.
4
Sub-paragraph (3)(a) is subject to paragraph 29H(4).
F1965
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Procedure on appeals29H
1
On an appeal F197that is notified to the tribunal, the tribunal shall uphold or quash the transfer notice.
2
The general rule in sub-paragraph (1) is subject to the following qualifications.
3
In the case of the ground of appeal specified in paragraph 29G(3)(a), the F198tribunal shall investigate the matter and shall—
a
uphold the amount of the relevant contributions debt specified in the transfer notice, or
b
reduce or increase the amount of the relevant contributions debt specified in the transfer notice to such amount as in F199the tribunal’s opinion is just and reasonable.
4
If the F200tribunal determines the amount of the relevant contributions debt of a managed service company under sub-paragraph (3), that amount is conclusive as to the amount of that relevant contributions debt in any later appeal relating to that debt.
5
In the case of the ground of appeal specified in paragraph 29G(3)(f), the F201tribunal may reduce the amount specified in the transfer notice to an amount determined in accordance with the equation—
6
In paragraph (5)—
RA means the reduced amount;
P means the number of days in the tax periods specified in the transfer notice during which the transferee was a person mentioned in section 688A(2);
TP means the number of days in the tax periods specified in the transfer notice;
AS means the amount specified in the transfer notice.
7
Withdrawal of transfer notices29J
1
A transfer notice shall be withdrawn if the F204tribunal quashes it.
2
A transfer notice may be withdrawn if, in the opinion of an officer of Revenue and Customs, it is appropriate to do so.
3
If a transfer notice is withdrawn, HM Revenue and Customs must give written notice of that fact to the transferee.
Application of Part 6 of the Taxes Management Act 197029K
1
For the purposes of this Chapter, Part 6 of the Taxes Management Act 1970 (collection and recovery) applies as if—
a
the transfer notice were an assessment of tax on employment income, and
b
the amount of earnings-related contributions specified in the transfer notice, and any interest payable on that amount under sub-paragraph (3) or (4) of paragraph 29F were income tax charged on the transferee;
and that Part of that Act applies with the modification specified in sub-paragraph (2) and any other necessary modifications.
2
Summary proceedings for the recovery of the specified amount may be brought in England and Wales or Northern Ireland at any time before the end of a period of 12 months beginning immediately after the expiry of the period mentioned in paragraph 29F(2).
3
The specified amount is one cause of action or one matter of complaint for the purposes of proceedings under sections 65, 66 and 67 of the Taxes Management Act 1970 (magistrates’ courts, county courts and inferior courts in Scotland).
4
But sub-paragraph (3) does not prevent the bringing of separate proceedings for the recovery of each of the amounts which the transferee is liable to pay for any tax period.
Repayment of surplus amounts29L
1
This paragraph applies if the amounts paid to HM Revenue and Customs in respect of a relevant contributions debt exceed the specified amount.
2
HM Revenue and Customs shall repay the difference on a just and equitable basis and without unreasonable delay.
3
Interest on any sum repaid shall be paid in accordance with paragraph 18 (payment of interest on repaid earnings-related contributions).
F386PART 3AA
Sch. 4 Pt. 3AA inserted (6.4.2021 immediately after S.I. 2020/1150 comes into force) by The Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020 (S.I. 2020/1220), regs. 1(2), 3(3)
DEBTS ARISING UNDER PART 2 OF THE SOCIAL SECURITY CONTRIBUTIONS (INTERMEDIARIES) REGULATIONS 2000
Recovery from relevant persons29LA
1
A deemed employer NICs debt may be recovered from a relevant person but this is subject to sub-paragraph (2).
2
A deemed employer NICs debt may only be recovered from a person described in paragraph (a) of the definition of relevant person in sub-paragraph (3) if an officer of Revenue and Customs considers there is no realistic prospect of recovery of all or part of it within a reasonable period of time from a person described in paragraph (b) of that definition.
3
In this Part—
“deemed employer NICs debt” means an amount—
- a
that a person (“the deemed employer”) is liable to pay under Schedules 4 and 4A in consequence of being treated under regulation 14(3) of the Intermediaries Regulations as having made a payment of deemed direct earnings to a worker F395(other than by virtue of regulation 24 of the Social Security Contributions (Intermediaries) Regulations 2000), and
- b
that an officer of Revenue and Customs considers there is no realistic prospect of recovering from the deemed employer within a reasonable period;
- a
“Intermediaries Regulations” means the Social Security Contributions (Intermediaries) Regulations 2000;
“relevant person”, in relation to a deemed employer NICs debt, means a person who is not the deemed employer and who—
- a
is the highest person in the chain identified under regulation 14(1) of the Intermediaries Regulations in determining that the deemed employer is to be treated as having made the payment of deemed direct earnings, or
- b
is the second highest person in that chain and is a qualifying person (within the meaning given by regulation 14(8) of the Intermediaries Regulations) at the time the deemed employer is treated as having made that payment of deemed direct earnings.
- a
Recovery of deemed employer NICs debt29LB
1
HMRC may not recover a deemed employer NICs debt in accordance with paragraph 29LA(1) unless it has given a recovery notice to the relevant person during the relevant period.
2
No recovery of a deemed employer NICs debt may be made—
a
if the deemed employer NICs debt relates to a year commencing before 6th April 2021, or
b
if the deemed employer is also “the client” described in regulation 13(1)(a) of the Intermediaries Regulations.
2
For the purposes of this Part, a “recovery notice” means a notice which complies with paragraph 29LD.
The relevant period29LC
1
In this Part, the “relevant period” in relation to a deemed employer NICs debt means the period beginning in accordance with sub-paragraph (2) and ending in accordance with sub-paragraph (3).
2
The relevant period begins—
a
upon the expiry of the period of 30 days beginning with the day on which the decision under section 8(1)(c) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 determining the amount referred to in paragraph (a) of the definition of deemed employer NICs debt in paragraph 29LA(3) becomes final and conclusive, or
b
when an officer of Revenue and Customs becomes aware of sufficient information to make a decision under section 8(1)(c) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 in relation to the amount referred to in paragraph (a) of the definition of deemed employer NICs debt in paragraph 29LA(3), but considers that it would be impractical to make such a decision on account of the liquidation, dissolution or other incapacity of the deemed employer.
3
The relevant period ends upon the expiry of the period of 12 months beginning with the day on which the period begins.
Contents of recovery notice29LD
1
A recovery notice must contain the following information—
a
the name and address of the deemed employer to whom the deemed employer NICs debt relates;
b
the name of “the worker” for the purposes of regulation 13(1)(a) of the Intermediaries Regulations to whom the deemed employer NICs debt relates;
c
the amount of the deemed employer NICs debt;
d
the tax periods to which the deemed employer NICs debt relates;
e
if the tax periods to which the deemed employer NICs debt relates are comprised in more than one year, the apportionment of the deemed employer NICs debt between those years;
f
the date on which the relevant period in relation to the deemed employer NICs debt began and whether the period began in accordance with paragraph 29LC(2)(a) or (b);
g
the relevant person's name and address;
h
whether the relevant person is a person described in paragraph (a) or (b) of the definition of relevant person in paragraph 29LA(3).
2
The recovery notice must also contain a statement, made by the officer of Revenue and Customs giving the notice, that the officer is of the view that there is no realistic prospect of recovering the deemed employer NICs debt within a reasonable period from—
a
the deemed employer; and
b
the person mentioned in paragraph (b) of the definition of relevant person in paragraph 29LA(3) in the case of a recovery notice given to a person mentioned in paragraph (a) of that definition.
Payment of deemed employer NICs debt and interest29LE
1
The relevant person must pay the amount of the deemed employer NICs debt to HMRC within 30 days beginning with the date on which the notice is given.
2
Interest accruing on the deemed employer NICs debt by virtue of section 101 of the Finance Act 2009 after expiry of the period of time mentioned in sub-paragraph (1) shall be treated as chargeable to the relevant person under that section.
Appeals29LF
1
A person who is given a recovery notice in relation to a deemed employer NICs debt may appeal against the notice on one or more of the grounds set out in sub-paragraph (3).
2
A notice of appeal must—
a
be given to HMRC within 30 days beginning with the day the recovery notice is given, and
b
specify the grounds of the appeal.
3
The grounds of appeal are—
a
that all or part of the amount specified in the notice in accordance with paragraph 29LD(1)(c) does not relate to a deemed employer NICs debt;
b
that there is a realistic prospect of recovering the deemed employer NICs debt from the deemed employer within a reasonable period of time;
c
that there is a realistic prospect of recovering the deemed employer NICs debt from the person described in paragraph (b) of the definition of relevant person in paragraph 29LA(3) within a reasonable period of time;
d
that the person is not a relevant person in respect of the deemed employer NICs debt;
e
that the recovery notice was not given within the relevant period;
f
that the recovery notice does not satisfy the requirements specified in paragraph 29LD.
4
But a person may not appeal on the ground mentioned in sub-paragraph (3)(a) if it has already been determined, on an appeal, that the deemed employer NICs debt is payable by the deemed employer.
5
Subject to sub-paragraph (6), on an appeal that is notified to the tribunal, the tribunal may uphold or quash the recovery notice.
6
In a case in which the ground of appeal mentioned in sub-paragraph (3)(a) is raised, the tribunal may also reduce or increase the amount specified in accordance with paragraph 29LD(1)(c) so that it does relate to a deemed employer NICs debt.
Withdrawal of recovery notices29LG
1
A recovery notice is withdrawn if the tribunal quashes it.
2
An officer of Revenue and Customs may withdraw a recovery notice if the officer considers it appropriate to do so.
3
If a recovery notice is withdrawn in accordance with sub-paragraph (2), HMRC must give notice of that fact to the person to whom the notice was given.
Application of Part 6 of TMA29LH
Part 6 of the Taxes Management Act 1970 (collection and recovery) applies as if—
a
the amount of the deemed employer NICs debt were income tax charged on the relevant person,
b
the recovery notice were an assessment, and
c
the giving of the recovery notice were the matter complained of for the purposes of section 65(3) of that Act.
F213PART 3BSecurity for the payment of Class 1 contributions
Sch. 4 Pt. 3B inserted (6.4.2012) by The Social Security (Contributions) (Amendment No. 3) Regulations 2012 (S.I. 2012/821), regs. 1(1), 18
Interpretation29M
In this Part—
“employer” has the meaning given in paragraph 29O(1);
“a further notice” has the meaning given in paragraph 29U(3);
“PGS” has the meaning given in paragraph 29S(1).
Requirement for security29N
In circumstances where an officer of Revenue and Customs considers it necessary for the protection of Class 1 contributions, the officer may require a person described in paragraph 29P(1) to give security or further security for the payment of amounts which an employer is or may be liable to pay to HMRC under paragraph 10, 11F265, 11ZA or 11A.
Employers29O
1
An “employer” is any employer within the meaning given in paragraph 1(2) other than—
a
the Crown;
b
a person to whom sub-paragraph (2) applies;
F288c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .; and
d
a care and support employer within the meaning given in regulation 90NA(3) of these Regulations.
2
This sub-paragraph applies to persons who at the relevant time could not be liable to a penalty under Schedule 56 to the Finance Act 2009 by virtue of paragraph 10 of that Schedule (suspension of penalty for failure to make payments on time during currency of agreement for deferred payment).
3
In sub-paragraph (2), the relevant time is a time at which, but for sub-paragraph (1)(b), the officer would require security.
Persons from whom security can be required29P
1
The persons are—
a
the employer;
b
any of the following in relation to the employer—
i
a director;
ii
a company secretary;
iii
any other similar officer; or
iv
any person purporting to act in such a capacity; and
c
in a case where the employer is a limited liability partnership, a member of the limited liability partnership.
2
An officer of Revenue and Customs may require—
a
a person to give security or further security of a specified value in respect of the employer; or
b
more than one person to give security or further security of a specified value in respect of the employer, and where the officer does so those persons shall be jointly and severally liable to give that security or further security.
Notice of requirement29Q
1
An officer of Revenue and Customs must give notice of a requirement for security to each person from whom security is required and the notice must specify—
a
the value of security to be given;
b
the manner in which security is to be given;
c
the date on or before which security is to be given; and
d
the period of time for which security is required.
2
The notice must include, or be accompanied by, an explanation of—
a
the employer's right to make a request under paragraph 10(1) of Schedule 56 to the Finance Act 2009; and
b
the effect of paragraph 29R(2) and (3).
3
In a case which falls within paragraph 29P(2)(b), the notice must include, or be accompanied by, the names of each other person from whom security is required.
4
The notice may contain such other information as the officer considers necessary.
5
A person shall not be treated as having been required to provide security unless HMRC comply with this paragraph and paragraph 29R(1).
6
Notwithstanding anything in regulation 1(4)(b), where the notice, or a further notice, (“contributions notice”) is to be given with a notice or further notice mentioned in regulations 97Q(1) and 97U(3) of the PAYE Regulations (“PAYE notice”) the contributions notice shall be taken to be given at the same time that the PAYE notice is given.
Date on which security is due29R
1
The date specified under paragraph 29Q(1)(c) may not be earlier than the 30th day after the day on which the notice is given.
2
If, before the date specified under paragraph 29Q(1)(c), the employer makes a request under paragraph 10(1) of Schedule 56 to the Finance Act 2009, the requirement to give security on or before that date does not apply.
3
In a case which falls within sub-paragraph (2), if HMRC does not agree to the employer's request, security is to be given on or before the 30th day after the day on which HMRC notifies the employer of that decision.
Application for reduction in the value of security held29S
1
A person who has given security (“PGS”) may apply to an officer of Revenue and Customs for a reduction in the value of security held by HMRC if—
a
PGS' circumstances have changed since the day the security was given because—
i
of hardship; or
ii
PGS has ceased to be a person mentioned in paragraph 29P(1); or
b
since the day the security was given there has been a significant reduction in the number of employed earners of the employer to whom the security relates or that employer has ceased to be an employer.
2
Where paragraph 29P(2)(b) applies, a person who has not contributed to the value of the security given may not make an application under sub-paragraph (1).
Outcome of application under paragraph 29S29T
1
If an application under paragraph 29S(1) is successful, the officer must inform PGS of the reduced value of security that is still required or, where that value is nil, that the requirement for security has been cancelled.
2
HMRC may make such arrangements as they think fit to ensure the necessary reduction in the value of security held.
Outcome of application under paragraph 29S: further provision29U
1
This paragraph applies—
a
in cases which fall within paragraph 29P(2)(b); and
b
where PGS' application is made under paragraph 29S(1)(a).
2
As a consequence of arrangements made under paragraph 29T(2), an officer of Revenue and Customs may require any other person who was given notice under paragraph 29Q in relation to the security (“the original security”), or any other person mentioned in paragraph 29P(1), to provide security in substitution for the original security.
3
Where an officer of Revenue and Customs acts in reliance on sub-paragraph (2), the officer must give notice (“a further notice”).
4
Paragraph 29Q(1) to (5) and paragraph 29R apply in relation to a further notice.
5
Subject to sub-paragraph (6), paragraph 29V(1) applies in relation to a further notice.
6
A person who is given a further notice and who was also given notice under paragraph 29Q in relation to the original security may only appeal on the grounds that the person is not a person mentioned in paragraph 29P(1).
Appeals29V
1
A person who is given notice under paragraph 29Q may appeal against the notice or any requirement in it.
2
PGS may appeal against—
a
the rejection by an officer of Revenue and Customs of an application under paragraph 29S(1); and
b
a smaller reduction in the value of security held than PGS applied for.
3
Notice of an appeal under this paragraph must be given—
a
before the end of the period of 30 days beginning with—
i
in the case of an appeal under sub-paragraph (1), the day after the day on which the notice was given; and
ii
in the case of an appeal under sub-paragraph (2), the day after the day on which PGS was notified of the outcome of the application; and
b
to the officer of Revenue and Customs by whom the notice was given or the decision on the application was made, as the case may be.
4
Notice of an appeal under this paragraph must state the grounds of appeal.
5
On an appeal under sub-paragraph (1) that is notified to the tribunal, the tribunal may—
a
confirm the requirements in the notice;
b
vary the requirements in the notice; or
c
set aside the notice.
6
On an appeal under sub-paragraph (2) that is notified to the tribunal, the tribunal may—
a
confirm the decision on the application; or
b
vary the decision on the application.
7
On the final determination of an appeal under this paragraph—
a
subject to any alternative determination by a tribunal or court, any security to be given is due on the 30th day after the day on which the determination is made; or
b
HMRC may make such arrangements as they think fit to ensure the necessary reduction in the value of the security held.
8
Part 5 of the Taxes Management Act 1970 (appeals and other proceedings) applies in relation to an appeal under this paragraph as it applies in relation to an appeal under the Taxes Acts but as if—
a
sections 46D, 47B, 50(6) to (9) and (11)(c) and 54A to 57 were omitted; and
b
in section 48(1)—
i
in paragraph (a) the reference to “the Taxes Acts” were a reference to “paragraph 29V of Schedule 4 to the Social Security (Contributions) Regulations 2001”; and
ii
in paragraph (b) the reference to “any provision of the Taxes Acts” were a reference to “paragraph 29V of Schedule 4 to the Social Security (Contributions) Regulations 2001”.
Appeals: further provision for cases which fall within paragraph 29R(2)29W
In a case which falls within paragraph 29R(2), if the request mentioned in that provision is made before an appeal under paragraph 29V(1), paragraph 29V(3)(a)(i) applies as if the words “the day after the day on which the notice was given” were “the day after the day on which HMRC notifies the employer of its decision”.
Offence29X
1
Section 684(4A) of the Income Tax (Earnings and Pensions) Act 2003 (PAYE regulations – security for payment of PAYE: offence) applies in relation to a requirement imposed under these Regulations as it applies in relation to a requirement imposed under the PAYE Regulations.
2
For the purposes of section 684(4A) as it applies by virtue of sub-paragraph (1)—
a
in relation to a requirement for security under a notice under paragraph 29Q the period specified is the period which starts with the day the notice is given and ends with—
i
the first day after the date specified under paragraph 29Q(1)(c); or
ii
in a case which falls within paragraph 29R(2), the first day after the date determined under paragraph 29R(3);
b
in relation to a requirement for security under a further notice the period specified is the period which starts with the day the further notice is given and ends with—
i
the first day after the date specified under paragraph 29Q(1)(c) as it applies in relation to the further notice; or
ii
in a case which falls within paragraph 29R(2), the first day after the date determined under paragraph 29R(3) as it applies in relation to the further notice; and
c
in relation to a requirement for security to which paragraph 29V(7)(a) applies the period specified is the period which starts with the day the determination is made and ends with the first day after—
i
the day the tribunal or court determines to be the day that the security is to be given; or
ii
the day determined in accordance with that paragraph,
as the case may be.
F375Part 3CCERTAIN DEBTS OF COMPANIES UNDER PARAGRAPH 3ZB OF PART 8 OF SCHEDULE 3 (TRAVEL EXPENSES OF WORKERS PROVIDING SERVICES THROUGH EMPLOYMENT INTERMEDIARIES)
Sch. 4 Pt. 3C inserted (E.W.S.) (28.11.2016) by The Social Security (Contributions) (Amendment No. 4) Regulations 2016 (S.I. 2016/1067), regs. 1, 7
Interpretation of Part 3C: “relevant contributions debt” and “relevant date”29Y
1
In this Part “relevant contributions debt”, in relation to a company means an amount within any of sub-paragraphs (2) to (5).
2
An amount within this sub-paragraph is an amount that the company is to account for in accordance with paragraph 3ZB(6A) to (6C) (persons providing fraudulent documents).
3
An amount within this sub-paragraph is an amount which a company is to deduct and pay by virtue of paragraph 3ZB in circumstances where—
a
a company is an employment intermediary,
b
on the basis that paragraph 3ZB does not apply by virtue of sub-paragraph (3) of that paragraph the company has not deducted and paid the amount, but
c
the company has not been provided by any other person with evidence from which it would be reasonable in all the circumstances to conclude that sub-paragraph (3) of that paragraph applied (and the mere assertion by a person that the manner in which the worker provided the services was not subject to (or to the right of) supervision, direction or control by any person is not such evidence).
4
An amount within this sub-paragraph is an amount that the company is to deduct and pay in accordance with paragraph 3ZB in circumstances where sub-paragraph (4) of that paragraph applies (services provided under arrangements made by intermediaries).
5
An amount within this sub-paragraph is any interest or penalty in respect of an amount within any of sub-paragraphs (2) to (4) for which the company is liable.
6
In this paragraph “paragraph 3ZB” means paragraph 3ZB of Part 8 of Schedule 3 to these Regulations.
7
In this Part “the relevant date” in relation to a relevant contributions debt means the date on which the first payment is due on which contributions are not accounted for.
Interpretation of Part 3C: general29Z
In this Part—
“company” includes a limited liability partnership;
“director” has the meaning given by section 67 of ITEPA 2003;
“personal liability notice” has the meaning given by paragraph 29Z1(2);
“the specified amount” has the meaning given by paragraph 29Z1(2)(a).
Liability of directors for relevant contributions debts29Z1
1
This paragraph applies in relation to an amount of relevant contributions debt of a company if the company does not deduct that amount by the time by which the company is required to do so.
2
HMRC may serve a notice (“personal liability notice”) on any person who was, on the relevant date, a director of the company—
a
specifying the amount of relevant contributions debt in relation to which this paragraph applies (“the specified amount”), and
b
requiring the director to pay HMRC—
i
the specified amount, and
ii
specified interest on that amount.
3
The interest specified in the personal liability notice—
a
is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 86 of the Taxes Management Act 1970, and
b
is to run from the date the notice is served.
4
A director who is served with a personal liability notice is liable to pay to HMRC the specified amount and the interest specified in the notice within 30 days beginning with the day the notice is served.
5
If HMRC serve personal liability notices on more than one director of the company in respect of the same amount of relevant contributions debt, the directors are jointly and severally liable to pay to HMRC the specified amount and the interest specified in the notices.
Appeals in relation to personal liability notices29Z2
1
A person who is served with a personal liability notice in relation to an amount of relevant contributions debt of a company may appeal against the notice.
2
A notice of appeal must—
a
be given to HMRC within 30 days beginning with the day the personal liability notice is served, and
b
specify the grounds of the appeal.
3
The grounds of appeal are—
a
that all or part of the specified amount does not represent an amount of relevant contributions debt, of the company, to which paragraph 29Z1 applies, or
b
that the person was not a director of the company on the relevant date.
4
But a person may not appeal on the ground mentioned in sub-paragraph (3)(a) if it has already been determined, on an appeal by the company, that—
a
the specified amount is a relevant contributions debt of the company, and
b
the company did not deduct, account for, or (as the case may be) pay the debt by the time by which the company was required to do so.
5
Subject to sub-paragraph (6), on an appeal that is notified to the tribunal, the tribunal is to uphold or quash the personal liability notice.
6
In a case in which the ground of appeal mentioned in sub-paragraph (3)(a) is raised, the tribunal may also reduce or increase the specified amount so that it does represent an amount of relevant contributions debt, of the company, to which paragraph 29Z1 applies.
Withdrawal of personal liability notices29Z3
1
A personal liability notice is withdrawn if the tribunal quashes it.
2
An officer of Revenue and Customs may withdraw a personal liability notice if the officer considers it appropriate to do so.
3
If a personal liability notice is withdrawn, HMRC must give notice of that fact to the person upon whom the notice was served.
Recovery of sums due under personal liability notice: application of Part 6 of Taxes Management Act 197029Z4
1
For the purposes of this Part, Part 6 of the Taxes Management Act 1970 (collection and recovery) applies as if—
a
the personal liability notice were an assessment, and
b
the specified amount and any interest on that amount under paragraph 29Z1(2)(b)(ii) were income tax charged on the director upon whom the notice is served, and that Part of that Act applies with the modification in paragraph (2) and any other necessary modifications.
2
Summary proceedings for the recovery of the specified amount, and any interest on that amount under paragraph 29Z1(2)(b)(ii), may be brought in England and Wales or Northern Ireland at any time before the end of the period of 12 months beginning with the day after the day on which personal liability notice is served.
Repayment of surplus amounts29Z5
1
This paragraph applies if—
a
one or more personal liability notices are served in respect of an amount of relevant contributions debt of a company, and
b
the amounts paid to HMRC (whether by directors upon whom notices are served or the company) exceed the aggregate of the specified amount and any interest on it under paragraph 29Z1(2)(b)(ii).
2
HMRC is to repay the difference on a just and equitable basis and without unreasonable delay.
3
HMRC is to pay interest on any sum repaid.
4
The interest—
a
is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 824 of the Taxes Act, and
b
is to run from the date the amounts paid to HMRC come to exceed the aggregate mentioned in sub-paragraph (1)(b).
PART IV ASSESSMENT AND DIRECT COLLECTION
Provisions for direct payment30
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.
F236Application of paragraphs 31 and 31A30A
1
Paragraph 31(4) to (7) does not apply on or after 6th April 2014.
2
Paragraph 31(7A) and (7B) applies only in relation to closed tax years ending on or before 5th April 2014.
3
Paragraph 31A applies on and after 6th April 2014.
Direct collection involving deductions working sheets31
1
In any case falling within paragraph 30, F289... sub-paragraphs (2) to (8) shall apply.
2
The employee F290... shall record on F291a working sheet his name, national insurance number and category letter indicated by F153HMRC, and whenever, in respect of an employment such as is specified in paragraph 30, the employee receives any F355F102... earnings during F292the relevant tax year, he shall also record on that working sheet the amount of the F102earnings, the date on which he received them, and the earnings-related contributions payable by him in respect of those F102earnings .
3
Not later than the time for the payment of income tax, if any, the employee shall pay to F153HMRC the amount of the earnings-related contributions payable by the employee in respect of the F355F103 ... earnings which have been received by him and for which the income tax is or would have been payable.
F2933A
Before 20 May 2014 the employee must deliver to HMRC a return in the prescribed form for the tax year 2013-14 showing the following information:
a
the total amount of the F355... earnings and earnings-related contributions payable during the tax year 2013-14,
b
the appropriate category letter,
c
the employee’s name and address, and
d
the employee’s national insurance number, 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.
4
If, by the time specified in sub-paragraph (3), the employee has paid no amount of earnings-related contributions to F153HMRC in respect of the F355F104 ... earnings mentioned in that sub-paragraph, and F153HMRC is unaware of the amount, if any, which the employee is liable so to pay, or if an amount has been paid but F153HMRC is not satisfied that it is the full amount which the employee is liable to pay to him in respect of those F104earnings, sub-paragraph (5) applies.
5
If this sub-paragraph applies, F153HMRC 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 F355F105 ... 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 F105earnings 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 F153HMRC 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 F355F106 ... earnings falling within sub-paragraph (2), he shall immediately render to F107F153HMRC, 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 F106earnings, the total of those F106earnings and the earnings-related contributions payable from the beginning of the year to that date.
7
F108Before 20th May following the end of the year, the employee shall (unless sub-paragraph (6) has applied) render to F109F153HMRC, 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 F355F110 ... 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.
F1547A
Where a liability arises to pay contributions in respect of retrospective earnings relating to a closed tax year, the F266employee 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 F266employee 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 F294... for not less than three years after the end of the year to which they relate.
9
F159Section 98A of the Taxes Management Act 1970 (special penalties in the case of certain returns) and Schedule 24 to the Finance Act 2007 (penalties for errors) as that Schedule applies to income tax 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 F155F295(3A) and (7A).
F237Direct collection involving deductions working sheets on and after 6th April 201431A
1
On receiving any F356... earnings which fall to be recorded on a deductions working sheet under paragraph 31(2), subject to sub-paragraph (2), an employee must proceed in accordance with paragraph 21A(1), (2) and (5).
2
If the employee falls within paragraph 21D(1)(a), the employee may instead proceed in accordance with paragraph 21D(3), (4) and (5).
3
For the purposes of sub-paragraph (1), paragraph 21A(8) and paragraphs 21AB, 21AC, 21AD, 21B and 21C apply as if the employee were a Real Time Information employer.
4
For the purposes of sub-paragraph (2), paragraph 21D(9) applies as if the employee were a Real Time Information employer.
5
For the purposes of sub-paragraphs (1) and (2), paragraphs 15, 16, 21E, 21EA and 21F(7A) and (8) and Schedule 4A apply as if the employee were a Real Time Information employer, but the information required by paragraph 10(a) and (b) of that Schedule need not be provided.
Sch. 4 heading substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 29(2)