Tax Credits Act 2002

25 Payments of working tax credit by employers

(1) Regulations may require employers, when making Schedule E payments and in any such other circumstances as may be prescribed, to pay working tax credit, or prescribed elements of working tax credit, to employees.

(2) The regulations may, in particular, include provision—

(a) requiring employers to make payments of working tax credit, or prescribed elements of working tax credit, in accordance with notices given to them by the Board,

(b) for the payment by the Board of working tax credit in cases where an employer does not make payments of working tax credit, or prescribed elements of working tax credit, in accordance with the regulations and with any notices given by the Board,

(c) prescribing circumstances in which employers are not required to make, or to continue making, payments of working tax credit, or prescribed elements of working tax credit,

(d) for the provision of information or evidence for the purpose of enabling the Board to be satisfied whether employers are complying with notices given by the Board and with the regulations,

(e) requiring employers to provide information to employees (in their itemised pay statements or otherwise),

(f) for the funding by the Board of working tax credit paid or to be paid by employers (whether by way of set off against income tax, national insurance contributions or student loan deductions for which they are accountable to the Board or otherwise),

(g) for the recovery by the Board from an employer of funding under paragraph (f) to the extent that it exceeds the amount of working tax credit paid by the employer,

(h) for the payment of interest at the prescribed rate on sums due from or to the Board, and for determining the date from which interest is to be calculated, and

(i) for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal.

(3) Section 20 of the Taxes Management Act 1970 (c. 9) (power to call for documents etc.) applies (with sections 20B and 20BB) in relation to an employer’s compliance with regulations under this section as in relation to a person’s tax liability (but subject to the modifications provided by subsection (4)).

(4) Those sections apply by virtue of subsection (3) as if—

(a) the references to the taxpayer, a taxpayer or a class of taxpayers were to the employer, an employer or a class of employers,

(b) the reference to any provision of the Taxes Acts were to regulations under this section,

(c) the references to the proper assessment or collection of tax were to the proper award or payment of working tax credit,

(d) the reference to an appeal relating to tax were to an appeal relating to compliance with regulations under this section, and

(e) the reference to believing that tax has been, or may have been, lost to the Crown were to believing that the Crown has, or may have, incurred a loss.

(5) In this Part—

• “employee” means a person who receives any Schedule E payment, and

• “employer”, in relation to an employee, means a person who makes any such payment to the employee.

(6) “Schedule E payment” means a payment of, or on account of, any income assessable to income tax under Schedule E.

(7) “Student loan deductions” means deductions in accordance with regulations under section 22(5) of the Teaching and Higher Education Act 1998 (c. 30), section 73B(3) of the Education (Scotland) Act 1980 (c. 44) or Article 3(5) of the Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14)).