The Income Tax (Pay As You Earn) Regulations 2003
PART 1INTRODUCTION
Citation and commencement
1Citation and commencement
Interpretation
2Interpretation
3Net PAYE income
4Relevant payments
5Excluded business expenses
6Relevant pension payments
7Meaning of “code” etc
8Employee’s code
9PAYE threshold
Application to payers and payees
10Application to agencies and agency workers
11Application to pension payers and pensioners
12Application to other payers and payees
PART 2CODES
Determination of code
13Determination of code by Inland Revenue
14Matters relevant to determination of code
15Flat rate codes
16Continued application of employee’s code
17Notice to employee of code
Appeals and amendment
18Objections and appeals against employee’s code
19Amendment of code
20Notice to employer of amended code
PART 3DEDUCTION AND REPAYMENT OF TAX
CHAPTER 1DEDUCTION AND REPAYMENT
Deduction and repayment by reference to employee’s code
21Deduction and repayment of tax by reference to employee’s code
The cumulative basis
22The cumulative basis
23Cumulative basis: deduction and repayment
24Cumulative basis: employee not paid weekly or monthly
25Cumulative basis: subsidiary PAYE income of employee paid weekly or at greater intervals
The non-cumulative basis
26The non-cumulative basis
27Non-cumulative basis: general rule for deductions
28Non-cumulative basis: modification of general rule
29Non-cumulative basis: aggregation of payments
30Non-cumulative basis: employee not paid weekly or monthly
31Payments in short payment periods
Higher rate and nil tax codes
32Higher rate code: deductions
33Nil tax code: no deductions or repayments
Simplified deduction scheme
34Simplified deduction scheme for personal employees
35Simplified deduction schemes: records
Cessation of employment
36Cessation of employment: Form P45
37PAYE income paid after employment ceased
38Death of employee
39Death of pensioner
Employee’s duty to provide Form P45
40Duty of employee to give new employer Form P45
CHAPTER 2NEW EMPLOYEES (OTHER THAN PENSIONERS): FORMS P45 AND P46
41Scope of Chapter 2
42Procedure if employer receives Form P45
43Form P45 for current tax year
44Form P45 for previous tax year: employment starting on or before 24th May
45Other Forms P45
46Form P46 where employer does not receive Form P45 and code not known
47Procedure in Form P46 Cases: Statement A applies
48Procedure in Form P46 Cases: Statement B applies
49Procedure in Form P46 Cases: Statement C applies or Form P46 not signed when required
50Procedure in Form P46 cases: code treated as issued by Inland Revenue
51Late presentation of Form P45
52Late presentation of Form P45: employer’s duties
53Form P46 cases: subsequent procedure on issue of employee’s code
CHAPTER 3NEW PENSIONERS: FORMS P45 AND P46
54Scope of Chapter 3
55PAYE pension income paid by former employer
56PAYE pension income paid by other pension payer
57Information to be provided in Form P46 if code not known: non UK residents
58Information (Form P46) and procedure if code not known: UK residents
59UK resident pensioner’s code treated as issued by Inland Revenue
60Late presentation of Form P45
61Subsequent procedure on issue of UK resident pensioner’s code
CHAPTER 4MISCELLANEOUS
62Deductions in respect of notional payments
63Repayment during unpaid leave
64Trade disputes
65Repayment if no longer employed
66Deductions working sheets
67Information to employees about payments and tax deducted (Form P60)
PART 4PAYMENTS, RETURNS AND INFORMATION
CHAPTER 1PAYMENT OF TAX AND ASSOCIATED RETURNS
Payment and recovery of tax by employer
68Periodic payments to and recoveries from the Revenue
69Due date and receipts for payment of tax
70Quarterly tax periods
71Modification of regulation 68 in case of trade dispute
72Recovery from employee of tax not deducted by employer
72AEmployer’s request for a direction and appeal against refusal
72BEmployee’s appeal against a direction notice where condition A is met
72CEmployee’s appeal against a direction notice where condition B is met
72DAppeals: supplementary provisions
Annual returns of relevant payments and tax
73Annual return of relevant payments liable to deduction of tax (Forms P35 and P14)
74Annual return of relevant payments not liable to deduction of tax (Form P38A)
75Additional return in case of trade dispute
Failure to account for deductible tax
76Certificate if tax in regulation 73 return is unpaid
77Return and certificate if tax may be unpaid
78Notice and certificate if tax may be unpaid
79Certificate after inspection of PAYE records
80Determination of unpaid tax and appeal against determination
81Employee liability if tax unpaid after regulation 80 determination
81AEmployee’s appeal against direction notice
Interest
82Interest on tax overdue
83Interest on tax overpaid
Recovery
84Recovery of tax and interest
CHAPTER 2OTHER RETURNS AND INFORMATION
Returns involving PAYE income other than payments
85Employers: annual return of other earnings (Forms P11D and P9D)
86Information employer must provide for each employee
87Information employer must also provide for benefits code employees
88Annual return of other earnings: amounts
89Annual return of other earnings: exclusion for notional payments
90Quarterly return if a car becomes available or unavailable (Form P46 (Car))
91Termination awards: information to be provided
92Termination awards: return if award changes
93Termination awards: return if more than one employer
Information to be given to employees
94Employers: information to employees of other earnings (Forms P11D and P9D)
95Third parties: information to employees of other earnings
96Termination awards: information to employees
CHAPTER 3PAYE RECORDS
97Inspection of employer’s PAYE records
PART 5EMPLOYERS
Special arrangements
98Multiple PAYE schemes
99Multiple PAYE schemes: election made for improper purpose ineffective
100Tips: special arrangements
Death of employer and succession
101Death of employer
102Succession to a business etc
103Death and succession
104Succession to a business: trade disputes
PART 6PAYE SETTLEMENT AGREEMENTS
Making and effect of PSA
105Inland Revenue and employer may make PSA
106Qualifying general earnings
107Effect of PSA
Payment of tax under PSA
108Calculation of tax payable under PSA
109Payment of tax and recovery proceedings
110Formal determination of tax payable by the employer
Form and commencement of PSA
111Form of PSA
112Commencement of PSA
Variation and cancellation of PSA
113Variation of PSA
114Cancellation of PSA
Interest
115Interest on unpaid tax
116Interest on overpaid tax
Records
117Inspection of PSA records
PART 7SPECIAL CASES
CHAPTER 1COUNCILLORS' ALLOWANCES
118Interpretation of Chapter 1
119Councillor’s option to have tax deducted at basic rate
120Particulars that local council must record
121Regulations apply as if basic rate option were issue of code
CHAPTER 2RESERVE FORCES' PAY
122Interpretation of Chapter 2
123Application of other Parts
124Deduction of tax
125Determination by Inland Revenue
126Objection against deduction of tax
127Appeal to Commissioners
128Amended determinations
129Certificate of tax deducted
130Repayment to reservist during tax year
131Particulars that Ministry must record
132End of year certificate
133Other PAYE income of reservist
CHAPTER 2ASOCIAL SECURITY LUMP SUMS
133AInterpretation of Chapter 2A
133BApplication of other Parts
133CDetermination of Rate of Deduction
133DNotification by Recipient of Notice of Tax Rate
133ECertificate of tax deducted
133FRepayment to recipient during tax year
133GRecords and notices
133HOther PAYE income of recipient
CHAPTER 3HOLIDAY PAY FUNDS
134Interpretation of Chapter 3
135Application of other Parts
136Deduction of tax
137Certificate of tax deducted
138Repayment to recipient during tax year
139Particulars that fund must record
140Other PAYE income of recipient
CHAPTER 4DIRECT COLLECTION AND SPECIAL ARRANGEMENTS
141Direct collection and special arrangements
142Direct collection: issue of deductions working sheet
143Direct collection: employee to keep records
144Direct collection: payment
145Direct collection: return when relevant payments cease
146Direct collection: end of year return
147Direct collection: failure to pay
PART 8SOCIAL SECURITY BENEFITS
CHAPTER 1JOBSEEKER'S ALLOWANCE: NORMAL CASES
148Interpretation of Chapters 1 and 2
149Scope of Chapter 1
150Application of other regulations
151Obtaining the claimant’s Form P45
152Deductions working sheet for claimants awarded taxable jobseeker’s allowance
153Form P45: deductions working sheet and return
154No Form P45: deductions working sheet and return
155Claimant’s code etc to be used for calculations
156Recording the amount of taxable jobseeker’s allowance
157Obligations at end of tax year
158When an award ceases
159Cessation of award: Form P45U
160Notification of taxable jobseeker’s allowance adjustment
161Tax calculation
162No tax calculation required in certain cases
163Death of claimant
164Finance
CHAPTER 2JOBSEEKER'S ALLOWANCE: SPECIAL CASES
165Scope of Chapter 2
166Jobseeker’s allowance paid directly to claimant
167Jobseeker’s allowance paid by employer
168Regulation 167 cases: application of other regulations
169When a Chapter 2 award ceases
170Information to be supplied at end of tax year
171Information to be supplied when an award of taxable jobseeker’s allowance ceases
172Adjustments of taxable jobseeker’s allowance
CHAPTER 3INCAPACITY BENEFIT
173Interpretation of Chapter 3
174Application of other regulations
175Emergency IB code to be used before claimant’s code issued
176Return in respect of all claimants to taxable incapacity benefit
177Further return required in certain cases
178Delivery of Form P45 to Department
179Determination of claimant’s code by Inland Revenue
180Death of claimant
CHAPTER 4INCOME SUPPORT
181Interpretation of Chapter 4
182Recording the amount of taxable income support
183Information to be supplied when an award of taxable income support ceases
184Adjustments of taxable income support
PART 9ASSESSMENT AND SELF-ASSESSMENT
185Adjusting total net tax deducted for purposes of sections 59A(1) and 59B(1) TMA
186Recovery: adjustment of employee’s code
187Repayment: adjustment of employee’s code
188Assessments other than self-assessments
PART 10COMMUNICATIONS
CHAPTER 1ELECTRONIC COMMUNICATIONS: INTERPRETATION
189Meaning of electronic communications etc
190Specified date
191Large and medium sized employers
CHAPTER 2ELECTRONIC COMMUNICATIONS: GENERAL
192Whether information has been delivered electronically
193Proof of content of electronic delivery
194Proof of identity of person sending or receiving electronic delivery
195Information sent electronically on behalf of a person
196Proof of delivery of information sent electronically
197Proof of payment sent electronically
198Use of unauthorised method of electronic communications
CHAPTER 3ELECTRONIC PAYMENT BY LARGE EMPLOYERS
199Large employers required to make specified payments electronically
200E-payment notices and appeal
201Employer in default if specified payment not received by applicable due date
202Default notice and appeal
203Default surcharge
204Surcharge notice and appeal
CHAPTER 4MANDATORY USE OF ELECTRONIC COMMUNICATIONS
205Mandatory use of electronic communications
206Specified employers
207Specified information
208E-filing notice and appeals
209Standards of accuracy and completeness
210Penalties and appeals
CHAPTER 5METHODS OF PROVIDING INFORMATION ETC
211How information must or may be delivered by employers
212Modifications for electronic version of Form P160
213How information may be delivered by Inland Revenue
214How information must be provided by employees
215Meaning of Form P45 and P46
216Service by post
PART 11SUPPLEMENTARY PROVISIONS
Miscellaneous appeals
217Appeals: supplementary provisions
Certificate that sum due and payment by cheque
218Certificate that sum due
219Payment by cheque
Transitional provisions, savings and revocations
220Transitional provisions, savings and revocations
SCHEDULE 1TRANSITIONAL PROVISIONS AND SAVINGS
PART 1GENERAL PROVISIONS
1Continuity of the law
2Paragraph 1 does not apply to any change in the...
3Anything which— (a) has been done, or has effect as...
4Any reference (express or implied) in these Regulations or any...
5Any reference (express or implied) in these Regulations to relevant...
6Any reference (express or implied) in these Regulations to—
7Any reference (express or implied) in these Regulations to general...
8Paragraphs 4, 5, 6 and 7 apply only in so...
9Paragraph 5 is without prejudice to the generality of paragraph...
10These Regulations have effect in relation to tax liable, under...
11Paragraph 10 is without prejudice to the generality of paragraphs...
12Paragraphs 1 to 11 have effect instead of paragraph (b)...
13General saving for old savings
14Interpretation
PART 2SPECIFIC PROVISIONS
15Modification of reference to payment to the Inland Revenue in regulation 68(2)
16FPCS information for the tax year ending 5th April 2002: employees not covered by regulation 46(1) of 1993 Regulations
17FPCS information for the tax year ending 5th April 2002: employees covered by regulation 46(1) of 1993 Regulations
18Due date for payments of tax in respect of tax periods ending before 6th April 2004
19Interest on unpaid tax: disapplication of regulation 82 for tax years before the tax year ending 5th April 1993
20Interest on unpaid tax: provisions applying to tax years before the tax year ending 5th April 1993
21Interest on tax overdue: application of regulation 82 to tax years from 1992-93 to 2003-04
22Interest on overpaid tax: disapplication of regulation 83 for tax years before the tax year ending 5th April 1997
23Interest on overpaid tax: provisions applying to tax years from 1992-93 to 1995-96
24Overpayments and underpayments of tax: tax years before the tax year ending 5th April 1997
25Overpayments and underpayments of tax: tax years before the tax year ending 5th April 2002
26Attribution of repayments: tax years before the tax year ending 5th April 1997
27Certificate that sum due: certificate of the collector
28Interpretation
SCHEDULE 2REVOCATIONS

2003 No. 2682

INCOME TAX

The Income Tax (Pay As You Earn) Regulations 2003

Made

Laid before the House of Commons

Coming into force

The Commissioners of Inland Revenue in exercise of the powers conferred on them by sections 684, 685(4), 692, 704, 705, 706, 707, 708 and 710 of the Income Tax (Earnings and Pensions) Act 20031, sections 59A(10), 59B(8), 98A and 113(1) of the Taxes Management Act 19702, sections 132 and 133(2) of the Finance Act 19993, section 136 of the Finance Act 20024, and sections 145(4) and 205 of the Finance Act 20035, hereby make the following Regulations: