The Income Tax (Pay As You Earn) Regulations 2003

Special arrangements U.K.

Multiple PAYE schemes U.K.

98.—(1) An employer may elect, for the purposes of these Regulations, to be treated as different employers in relation to different groups of employees.

(2) Where the employer makes an election, these Regulations apply as if—

(a) in respect of each group the employer were a different employer;

(b) each group constituted all of the employer’s employees;

(c) each group were employed in a separate undertaking from the others; F1 ...

(d) an employee who has moved from one group to another has left one employment and started employment with a new employer;

[F2 (e) an employee who is allocated to more than one group has more than one employment; and

(f) an employee who is deallocated from one group has left an employment]

(3) While an election is in force, an employer must allocate any new employees to [F3 at least] one of the groups.

(4) An election must be made by notice to the Inland Revenue containing—

[F4 (za) the tax month from which the election is to have effect,]

(a) such information as may be necessary to identify the groups of employees, and

(b) a certificate that each employee falls into [F5 at least] one of the groups.

(5) An employer must F6 ... make an election before the beginning of the [F7 tax month immediately preceding the tax month from which the election] is to have effect.

[F8 (5A) A late election will be treated as if it had been made in relation to the tax month immediately following the tax month from which the election was stated to have had effect.]

F9 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) An election continues in effect until revoked by a notice given to the Inland Revenue.

(9) A notice of revocation must be given before the beginning of the [F11 tax month] for which the election is to be revoked, but the revocation of an election does not prevent the making of a new election for that or a later [F11 tax month].

(10) An election which has not yet come into effect may be revoked at any time before the beginning of the [F12 tax month] for which it is to have effect.

(11) This regulation is subject to regulation 99.

Textual Amendments

F1 Word in reg. 98(2)(c) omitted (6.4.2022) by virtue of The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(a) (with reg. 1(4))

F2 Reg. 98(2)(e)(f) inserted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(b) (with reg. 1(4))

F3 Words in reg. 98(3) inserted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(c) (with reg. 1(4))

F4 Reg. 98(4)(za) inserted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(d) (with reg. 1(4))

F5 Words in reg. 98(4)(b) inserted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(c) (with reg. 1(4))

F6 Words in reg. 98(5) omitted (6.4.2022) by virtue of The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(e)(i) (with reg. 1(4))

F7 Words in reg. 98(5) substituted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(e)(ii) (with reg. 1(4))

F8 Reg. 98(5A) inserted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(f) (with reg. 1(4))

F9 Reg. 98(6) omitted (6.4.2022) by virtue of The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(g) (with reg. 1(4))

F10 Reg. 98(7) omitted (6.4.2022) by virtue of The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(g) (with reg. 1(4))

F11 Words in reg. 98(9) substituted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(h) (with reg. 1(4))

F12 Words in reg. 98(10) substituted (6.4.2022) by The Income Tax (Pay As You Earn) and the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2022 (S.I. 2022/227), regs. 1(2), 4(i) (with reg. 1(4))

Commencement Information

I1 Reg. 98 in force at 6.4.2004, see reg. 1

Multiple PAYE schemes: election made for improper purpose ineffective U.K.

99.—(1) An election made under regulation 98 must be disregarded if the Inland Revenue—

(a) issue a notice to the employer stating that it appears to them that the election is made wholly or mainly for an improper purpose (“an improper purpose notice”), and

(b) issue the improper purpose notice within 60 days of the making of the election.

(2) An election is made for an “improper purpose” if it is made for the purpose of—

(a) avoiding the requirement imposed by regulation 199 (large employers required to make specified payments electronically),

F13 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) An employer may appeal against an improper purpose notice by giving notice to the Inland Revenue within 30 days of the issue of the improper purpose notice.

(4) The grounds of appeal are—

(a) that the election was not made wholly or mainly for an improper purpose, or

(b) that the improper purpose notice was not issued within 60 days of the election.

(5) If the appeal is successful the improper purpose notice must be withdrawn.

(6) Regulation 217 (appeals: supplementary provisions) applies to appeals under this regulation.

Textual Amendments

F13 Reg. 99(2)(b) omitted (6.4.2011 in relation to the tax year 2011-12 and subsequent tax years) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2010 (S.I. 2010/668), regs. 1(4), 16(c)

F14 Reg. 99(2)(c) omitted (6.4.2010) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2010 (S.I. 2010/668), regs. 1(2), 16(b)

Commencement Information

I2 Reg. 99 in force at 6.4.2004, see reg. 1

Tips: special arrangements U.K.

100.—(1) This regulation applies if an organised arrangement exists for tips to be shared among employees by a person (“T”) who is not the principal employer.

(2) On becoming aware of the existence of an arrangement, the principal employer must notify the Inland Revenue about the arrangement giving T’s name, if known.

(3) For the purposes of these Regulations—

(a) every payment made to an employee by way of the employee’s share of tips by T (including the retention by T of T’s own share if T is also an employee) is regarded as a relevant payment by T; and

(b) to the extent of any such payment, T is regarded as the employer.

(4) But if in any case the Inland Revenue are satisfied that T has failed to comply with any of the requirements of these Regulations and they so direct, then—

(a) any tips paid to T through the principal employer for sharing among the employees are to be dealt with in accordance with paragraph (5), and

(b) any other tips may be taken into account by the Inland Revenue under regulation 14(1)(b) in determining the code for each employee.

(5) If this paragraph applies—

(a) the principal employer is treated as the employer for the purposes of these Regulations in relation to the tips;

(b) T must, before the principal employer pays any tips to T, give the principal employer such particulars of every payment by way of the sharing of tips to be made to an employee as may be necessary to enable the principal employer to comply with these Regulations;

(c) the principal employer must, on making any payment of tips to T, deduct or repay tax in accordance with these Regulations in respect of the amount of such tips to be paid to each employee, and notify T of each amount so deducted or repaid.

(6) Paragraph (2) does not apply if the arrangement came into existence before 6th April 2004.

(7) In this regulation—

“the principal employer” means the person under whose general control and management the employees work;

“tips” means gratuities and service charges.

Commencement Information

I3 Reg. 100 in force at 6.4.2004, see reg. 1