Amendment of the principal Regulations16

1

Amend Schedule 4 (provisions derived from the Income Tax Acts and the Income Tax (Employments) Regulations 199315) as follows.

2

In paragraph 7(13)—

a

in paragraph (b)—

i

for sub-paragraphs (iv) and (v) substitute—

iv

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;

ii

after sub-paragraph (vi) insert—

vii

any statutory paternity pay; and

viii

any statutory adoption pay.

The amounts to be recorded under sub-paragraphs (iv) and (v) are the amounts of contributions after deducting the amount of any reduction calculated in accordance with section 41(1) to (1B) or section 42A(1) to (2A) of the Pensions Act16 (“the reduction”), subject to the following qualification.

If the amount of the reduction exceeds the amount of the contributions in respect of which it falls to be made, the amount to be entered under sub-paragraph (v) is nil.

b

omit paragraph (c).

3

In paragraph 9(1)—

a

after paragraph (e) insert—

f

the amount of statutory maternity pay paid to the employee;

g

the amount of statutory paternity pay paid to the employee; and

h

the amount of statutory adoption pay paid to the employee;

b

for “head (e)” substitute “paragraph (e)”.

4

For paragraph 11(4) substitute—

4

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

The formula is—

(N+P+L+S)-(T+SP+CD)math

  • The expressions used in the formula have the following values.

    • N is the amount which would be payable to the Collector 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 17 (transfer of liability to be borne by the earner); and

      2. b

        any adjustment to the amount so payable to the Collector under regulation 7(2) of the Working Tax Credit (Payment by Employers) Regulations 2002 (funding of payment of working tax credit) 18.

    • P is the amount which would be payable to the Collector under regulation 40 of the Income Tax Regulations if any adjustment to that amount under regulation 7(2) of the Working Tax Credit (Payment by Employers) Regulations 2002 were disregarded.

    • L is the amount which would be payable to the Collector under regulation 39(1) of the Education (Student Loans) (Repayment) Regulations 2000 (payment of repayments deducted to the Inland Revenue) 19 if the reduction referred to in paragraph (3) of that regulation and in regulation 7(2) of the Working Tax Credit (Payment by Employers) Regulations 2002 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 199320, from payments made by him.

    • T is the amount payable by the employer to his employees by way of tax credit under the Working Tax Credit (Payment by Employers) Regulations 2002.

    • SP is the amount—

      1. a

        recoverable by the employer from the Board, or

      2. b

        deductible from amounts for which the employer would otherwise be accountable to the Board,

      in respect of payments to his employees by way of statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption 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.

5

In paragraph 22—

a

in sub-paragraph (1)(c)—

i

in sub-paragraph (i) for “heads (i) to (iv)” substitute “sub-paragraphs (i) to (v)”; and

ii

omit sub-paragraphs (ii) and (iii);

b

at the end of sub-paragraph (1)(d) omit “and” and insert—

da

the total amount of statutory paternity pay paid during the year;

db

the total amount of statutory adoption pay paid during the year; and

c

at the end of sub-paragraph (2)(d) omit “and” and insert—

da

in respect of statutory paternity pay paid during that year to all his employees the total of the amounts determined under regulation 5 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 200221;

db

in respect of statutory adoption pay paid during that year to all his employees the total of the amounts determined under regulation 5 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002; and

6

In paragraph 26 (inspection of employer’s records) after sub-paragraph (3) insert—

3A

Where records are maintained by computer, the employer shall provide the officer with all facilities necessary for obtaining information from them.