The Income Tax (Pay As You Earn) (Amendment No. 3) Regulations 2020

EXPLANATORY NOTE

(This note is not part of the Regulations)

The Regulations which come into force on 6th April 2021 amend the Income (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) (“PAYE Regulations”).

Regulations 2 and 3 insert Chapter 5 into Part 4 of the PAYE Regulations to provide for the recovery of an amount of income tax arising under Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) from a person other than the person treated as making a payment of earnings from an employment to a worker by virtue of section 61N(3) ITEPA.

Regulation 97LA enables an officer of Revenue and Customs to recover a “deemed employer PAYE debt” from a “relevant person” where the officer considers there is no realistic prospect of recovery within a reasonable period from the person liable for the debt by virtue of Chapter 10 of ITEPA. The regulation also specifies the order in which debts may be pursued from relevant persons.

Regulation 97LB sets out the circumstances in which a deemed employer PAYE debt may not be recovered.

Regulations 97LC defines the beginning and end of the “relevant period” during which a recovery notice may be given.

Regulation 97LD specifies the contents of the recovery notice. Regulation 97LE specifies the time by which a relevant person must pay a deemed employer PAYE debt and the time from which that person is liable to pay any interest accruing on that amount.

Regulation 97LF specifies the grounds on which an appeal against a recovery notice may be made, the time limits for doing so and the determinations that may be made by a tribunal.

Regulation 97LG specifies the circumstances in which a recovery notice may be withdrawn.

Regulation 97LH provides for recovery of an amount of deemed employer PAYE debt in accordance with Part 6 of the Taxes Management Act 1970 (c.9).

A Tax Information and Impact Note covering this instrument was published on 11 July 2019 alongside draft legislation on the reform of the off-payroll working rules and is available on the website at: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020. Due to the delay to the implementation of the reform, an updated Tax Information and Impact Note will be published at the next fiscal event.