PART 3DEDUCTION AND REPAYMENT OF TAX
CHAPTER 1DEDUCTION AND REPAYMENT
The cumulative basis
Cumulative basis: deduction and repayment23
1
This regulation provides for deductions and repayments on the basis of total payments to date (the cumulative basis).
2
In this regulation—
a
TT is the total tax to date relating to an employee;
b
UT is any tax not deducted because of the overriding limit when the last relevant payment was made to the employee, and is nil if the payment in question is the first relevant payment to the employee in any tax year;
c
PT is the previous total tax to date relating to the employee, and is nil if the payment in question is the first relevant payment to the employee in any tax year.
3
The employer must, before making any relevant payment to the employee, calculate TT.
4
If TT + UT exceeds PT, the employer must deduct the excess from the relevant payment on making the payment.
5
But ... the deduction is not to exceed the overriding limit, subject to 62(6) (notional payments).
6
If TT + UT is less than PT, the employer must repay the difference to the employee on making the payment, subject to regulations 25(4) (extra payment made before main payment) and 64 (trade disputes).
7
If TT + UT equals PT, the employer must neither deduct nor repay tax when making the payment.
8
“Previous total tax to date” means the total tax to date corresponding to the employee’s total payments to date and the employee’s code—
a
at the date of the last preceding relevant payment, or
b
if later, at the date on which the employer complied with this regulation as if a relevant payment had been made.
9
But—
a
if the employee’s code is an amended code, and
b
the employee’s previous code was not used on the cumulative basis,
“previous total tax to date” means the total net tax deducted by the employer.
10
Paragraphs (2)(c), (8) and (9) are subject to regulations 43(9) and (10), 52(11) and (12), 53(4) and 61(4) (which modify the meaning of previous total tax to date in certain circumstances).