The Income Tax (Employments) (Incapacity Benefit) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Employments) Regulations 1993 (S. I. 1993/744) (“the principal Regulations”) so as to provide for the operation of PAYE, with effect for the year 1995 – 96 and subsequent years of assessment, on payments of taxable incapacity benefit made to a claimant by the Department of Social Security or, in Northern Ireland, the Department of Health (“the Department”).

Regulation 1 provides for citation, commencement and effect and regulation 2 contains definitions. Regulation 3 is introductory to the following Regulations which amend the principal Regulations.

Regulations 4 and 5 amend regulations 81 and 82 in Part VII of the principal Regulations (Social Security Benefits) so as to enable PAYE to be applied to payments of incapacity benefit.

Regulation 6 inserts a new chapter (IV) in Part VII of the principal Regulations comprising regulations 98A to 98H.

Regulation 98A contains a definition.

Regulation 98B provides that, subject to the provisions of Chapter IV, other Parts of the principal Regulations shall apply to payments of incapacity benefit as if they were payments of emoluments.

Regulation 98C provides for the operation of PAYE by the Department on payments of incapacity benefit to a claimant who does not have another source of income subject to PAYE.

Regulation 98D provides for the making of returns by the Department to the inspector in connection with payments of incapacity benefit.

Regulation 98E provides that, where the claimant possesses copies of his former employer’s certificate relating to the cessation of his employment (P45), he shall transmit the copies to the Department who shall then forward them to the inspector.

Regulation 98F makes provision for the determination by the inspector of the appropriate code for PAYE purposes in connection with payments of incapacity benefit.

Regulation 98G provides that in the circumstances specified in the regulation the inspector may determine that no tax shall be deducted from any payment of incapacity benefit.

Regulation 98H provides for the procedure which the Department is to follow in accordance with the principal Regulations after the appropriate code has been determined by the inspector, and a code authorisation has been issued to the Department, in respect of a claimant.