These Regulations amend the Income Tax (Pay As You Earn) Regulations 2003 (“the PAYE Regulations”) to provide a right of appeal against directions made under regulations 72 and 81 of those Regulations in relation to an amount of tax that an employer was required to deduct under the PAYE Regulations from a payment to an employee but failed to deduct.

Regulation 1 provides for citation and commencement and regulation 2 introduces the amendments to the PAYE Regulations.

Regulation 3 amends regulation 72 to extend the term definition of the “excess” to the new regulations and provide for a notice where a direction is made (“the direction notice”).

Regulation 4 inserts new regulations 72A, 72B, 72C and 72D.

New regulation 72A makes provision for an employer to request the Inland Revenue make a direction where the employer considers an error was made in good faith despite taking reasonable care to comply with the PAYE Regulations and for the employer to appeal if the Inland Revenue refuse to make a direction.

New regulations 72B and 72C makes provision for an employee to appeal against a direction notice.

New Regulation 72D makes supplementary appeals provisions.

Regulation 5 amends regulation 81 of the PAYE Regulations to provide that a direction made where tax has been determined under regulation 80 and the employee is considered to have received payment knowing that the employer wilfully failed to deduct the amount of tax which should have been deducted, or the unpaid tax represents an amount in relation to a notional payment, must be made by notice served on the employee (“the direction notice”).

Regulation 6 inserts new regulation 81A which makes provision for an employee to appeal against a direction notice under regulation 81(4A).

These Regulations do not impose any new costs on business.