SCHEDULE 4Provisions derived from the Income Tax Acts and the Income Tax (Pay As You Earn) Regulations 2003

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

Payments of earnings-related contributions quarterly by employer

11.

(1)

Subject to F1sub-paragraph (1A) and paragraph 15(8), the employer shall pay the amount specified in sub-paragraph (2) to the F2Inland Revenue within 14 days of the end of every F3... tax quarter F4or, 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

F5(b)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(1A)

This paragraph does not apply in respect of amounts of retrospective earnings.

(2)

The amount specified in this sub-paragraph is the total amount of earnings-related contributions due in respect of F7F8... earnings paid by the employer in that F9... tax quarter, F10(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 RegulationsF11....

(3)

For the purposes of sub-paragraph (2), where two or more payments F12of F7... 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.

F13(3A)

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) appliesF14, or failures rectified under paragraph 21EA(2).

F15(3B)

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.

F16(4)

The condition specified in this sub-paragraph is that for F17tax months falling within the current year, the average monthly amount found by the formula below will be less than £1500.

The formula is—

F18(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 F19Inland Revenue under the Social Security Contributions and Benefits Act 1992 and these Regulations but disregarding—

      1. (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

      2. (aa)

        F20any amount payable in respect of retrospective earnings;

      3. (c)

        F21...

    • F22“P” is the amount which would be payable to HMRC under regulation F23 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 F19Inland Revenue under F24regulation 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 F25...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.

    • F26...

    • SP is the amount—

      1. (a)

        recoverable by the employer from F27the Inland Revenue, or

      2. (b)

        deductible from amounts for which the employer would otherwise be accountable to F27the Inland Revenue,

      in respect of payments to his employees by way of F28... statutory maternity pay, F29F30statutory paternity payF31, statutory shared parental payF32, statutory adoption pay and statutory parental bereavement pay.

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