The Income Tax (Sub-contractors in the Construction Industry and Employments) (Amendment) Regulations 2003

Amendment of the Sub-contractors Regulations

4.  For regulation 9(2) (circumstances in which a contractor may account quarterly for sums deducted under section 559) (1) substitute—

“(2) The condition is that, for income tax months falling within the current year, the average monthly amount found by the formula below will be less than £1500.

• The formula is—

  

  The expressions used in the formula have the following values.

  • S is the amount which would be payable by the contractor to the collector under regulation 8.

  • P is the amount which would be payable by the contractor to the collector under regulation 40 of the Income Tax (Employments) Regulations 1993(2) if any adjustment to that amount under regulation 7(2) of the Working Tax Credit (Payments by Employers) Regulations 2002(3) (funding of payment of working tax credit) were disregarded.

  • N is the amount which would be payable by the contractor to the collector under the Social Security Contributions and Benefits Act 1992(4) or, in Northern Ireland, the Social Security Contributions and Benefits (Northern Ireland) Act 1992(5) and (in either case) under the Social Security (Contributions) Regulations 2001(6) but disregarding—

    (a)

    any amount of secondary Class 1 contributions in respect of which liability has been transferred to the employed earner by an election made jointly by the employed earner and the secondary contributor for the purpose of paragraph 3B(1) of Schedule 1 to either of those Acts(7) (transfer of liability to be borne by the earner); and

    (b)

    any adjustment to the amount so payable to the collector under regulation 7(2) of the Working Tax Credit (Payments by Employers) Regulations 2002.

  • L is the amount which would be payable by the contractor to the collector under regulation 39(1) of the Education (Student Loans) (Repayment) Regulations 2000(8) or of the Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2000(9) (payment of repayments deducted to the Inland Revenue) if the reduction referred to in paragraph (3) of the respective regulation and in regulation 7(2) of the Working Tax Credit (Payment by Employers) Regulations 2002 were disregarded.

  • C is the amount which would be payable by the contractor to his employees by way of tax credit under the Working Tax Credit (Payment by Employers) Regulations 2002.

  • SP is the amount which would be recoverable from the Board by the contractor in respect of payments to his employees by way of statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay.

  • Here statutory sick say, statutory maternity pay, statutory paternity pay and statutory adoption have the same meanings as they do in the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as the case requires.

  • CD is—

    (a)

    in the case of a company, the amount which others would deduct from payments to it (in its capacity as a sub-contractor) under section 559 of the Taxes Act; and

    (b)

    in any other case, nil.”.

(1)

Regulation 9(2) was amended by regulation 2 of S.I. 2000/1151 and regulation 2 of S.I. 2000/2742.

(2)

Regulation 40 has been amended by regulation 6 of S.I. 1993/2776.

(3)

S.I 2002/2172.

(4)

1992 c. 4.

(5)

1992 c. 7.

(6)

S.I 2001/1004.

(7)

Paragraph 3B was inserted in Schedule 1 to the Social Security Contributions and Benefits Act 1992 by section 77(2), and in Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 by section 81(2), of the Child Support, Pensions and Social Security Act 2000 (c. 19).

(8)

S.I.2000/944.

(9)

S.R. 2000 No. 121.