PART 3DEDUCTION AND REPAYMENT OF TAX

CHAPTER 1DEDUCTION AND REPAYMENT

Simplified deduction scheme

Simplified deduction scheme for personal employeesI134

1

The Inland Revenue may F2, subject to paragraph (1A), authorise the employer of a personal employee to deduct tax from each relevant payment made to the employee by reference to the appropriate taxable payments in the simplified tax tables.

F11A

But authorisation under paragraph (1) must not be given on or after 6th April 2012.

2

The amount of tax to be deducted must be—

a

calculated by reference to the aggregate of the relevant payments made to the authorised personal employee during the payment period, and

b

reduced by the amount of tax calculated, by reference to that aggregate, when the employer made the previous relevant payment in the same payment period.

3

In this regulation—

  • “payment period” means the interval for which free pay is calculated shown on the deductions working sheet issued in accordance with regulation 35(3);

  • “personal employee” means—

    1. a

      a person employed at the employer’s home to provide domestic or personal services for the employer or the employer’s family, or

    2. b

      a person employed to assist the employer with any business, profession or course of study which, solely because of any physical or mental disability, the employer would not be able to carry on without the assistance of the personal employee;

    and “authorised personal employee” means a personal employee in respect of whom an authorisation under paragraph (1) is in force;

  • “simplified tax tables” means the parts of the tax tables which are prepared by the Board of Inland Revenue for use under this regulation.

4

The following regulations do not apply to cases in which this regulation and regulation 35 apply—

regulation 15

flat rate codes

regulation 16

continued application of employee’s code

regulation 21

deduction and repayment of tax by reference to employee’s code

regulations 22 to 25

cumulative basis

regulations 26 to 31

non-cumulative basis

regulations 32 and 33

higher rate and nil tax codes

regulation 36

cessation of employment: Form P45

regulations 42 to 45

employer to complete Form P45

regulation 55

PAYE pension income paid by former employer

regulation 66

deductions working sheets.