The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2010

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations, which come into force on 14th November 2010, amend regulation 70(3) of the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) (“the PAYE Regulations”) following the introduction of additional statutory paternity pay.

Regulations made under Part 12ZA of the Social Security Contributions and Benefits Act 1992 (c.4) as amended by the Work and Families Act 2006 (c.18) made provision for the payment of additional statutory paternity pay in Great Britain. Corresponding provision was made in respect of Northern Ireland by regulations made under Part 12ZA of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c.7) as amended by the Work and Families (Northern Ireland) Order 2006 (S.I. 2006/1947 (N.I.16)). As a consequence of the introduction of additional statutory paternity pay, from the date of commencement of the relevant part of the Work and Families Act 2006 and the Work and Families (Northern Ireland) Order 2006, “statutory paternity pay” is to be re-named “ordinary statutory paternity pay”.

Where regulation 70 applies, which is determined (in part) by reference to a formula in regulation 70(2), an employer may choose to pay the income tax required pursuant to regulation 68 of the PAYE Regulations by reference to a quarterly tax period. The elements comprising the regulation 70(2) formula are defined in regulation 70(3). These regulations amend the “SP” element of the formula by substituting the reference to statutory paternity pay with references to ordinary statutory paternity pay and additional statutory paternity pay.

A full Impact Assessment has not been produced in relation to this instrument as no impact on the private or voluntary sectors is foreseen. An Impact Assessment in respect of the introduction of additional statutory paternity pay has been prepared and is available from the Employment Relations Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H 0ET or at www.bis.gov.uk. Copies have also been placed in the libraries of both Houses of Parliament.