The Working Tax Credit (Payment by Employers) Regulations 2002

Funding of payment of working tax credit

7.—(1) In this regulation—

• “amount A” is the total amount of tax which the relevant employer is required to pay to the collector of taxes in respect of deductions from the emoluments of his employees in accordance with the Employments Regulations for an income tax month or income tax quarter (“the relevant period”);

• “amount B” is the total amount of deductions made by the relevant employer from the emoluments of his employees for the relevant period in accordance with regulations made under section 22(5) of the Teaching and Higher Education Act 1998(1) , section 73B(3) of the Education (Scotland) Act 1980(2), or Article 3(5) of the Education (Student Support) (Northern Ireland) Order 1998(3) (student loan repayments);

• “amount C” is the total amount of earnings-related contributions which the relevant employer is required to pay to the collector of taxes in respect of the emoluments of his employees for the relevant period (whether by means of deduction or otherwise) in accordance with the Contributions Regulations;

• “amount D” is the total amount of deductions which as a contractor the relevant employer is required to make from payments to which section 559 of the Taxes Act(4) applies in accordance with the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993(5) for the relevant period.

(2) The relevant employer shall fund payment of working tax credit for the relevant period in accordance with the following rules.

• Rule 1

• The relevant employer shall fund any payment of working tax credit for the relevant period from amount A for that period. Amount A shall accordingly be reduced by the amount of working tax credit which the employer has paid in respect of that period.

• Rule 2

• If the total amount of working tax credit which the relevant employer is required to pay for the relevant period exceeds amount A for that period, the employer shall fund payment of working tax credit for that period (or so much of the payment as remains outstanding) from the aggregate of amount A and amount B for that period. That aggregate shall accordingly be reduced by the amount used to fund payment of working tax credit for that period.

• Rule 3

• If the total amount of working tax credit which the relevant employer is required to pay for the relevant period exceeds the aggregate of amount A and amount B for that period, the employer shall fund payment of working tax credit for that period (or so much of the payment as remains outstanding) from the aggregate of amount A, amount B and amount C for that period. That aggregate shall accordingly be reduced by the amount used to fund payment of working tax credit for that period.

• Rule 4

• If the total amount of working tax credit which the relevant employer is required to pay for the relevant period exceeds the aggregate of amount A, amount B and amount C for that period, the employer shall fund payment of working tax credit for that period (or so much of the payment as remains outstanding) from the aggregate of amount A, amount B, amount C and amount D for that period. That aggregate shall accordingly be reduced by the amount used to fund payment of working tax credit for that period.

• Rule 5

• If the total amount of working tax credit which the relevant employer is required to pay for the relevant period exceeds the aggregate of amount A, amount B, amount C and amount D for that period, the employer may apply to the Board in accordance with regulation 8 to fund payment of working tax credit for that period (or so much of the payment as remains outstanding).

(3) References in paragraph (1) to the total amount in the case of each of amount A, amount B, amount C and amount D are references to that total amount unreduced by any other amount which the relevant employer is entitled by virtue of any enactment to set off against that total amount.

(1)

1998 c. 30. Regulations made under section 22(5) of the Teaching and Higher Education Act 1998 and section 73B(3) of the Education (Scotland) Act 1980 are the Education (Student Loans) (Repayment) Regulations 2000 (S.I. 2000/944).

(2)

1980 c. 44. Section 73B was inserted by section 29(2) of the Teaching and Higher Education Act 1998.

(3)

S.I. 1988/1760 (N.I. 14). Relevant instruments made under S.I. 1988/1760 (N.I. 14) are S.R. 1999 Nos. 192 and 370.

(4)

Section 559 was amended by S.I. 1989/2405 Schedule 9 paragraph 61 and Schedule 10, section 139(1) and (2) of, and paragraph 1(2) and (3) of Schedule 27 and Part VIII(21) of Schedule 29 to, the Finance Act 1995 (c. 4), and sections 55(2) and 57 of, and paragraph 1 of Schedule 7 and paragraph 2(1) of Schedule 8 to, the Finance Act 1998 (c. 36).

(5)

S.I. 1993/743. Relevant amending instruments are S.I. 1995/448, 1996/981, 1998/2622 and 2000/1151.