PART 3U.K.DEDUCTION AND REPAYMENT OF TAX

CHAPTER 1U.K.DEDUCTION AND REPAYMENT

Deduction and repayment by reference to employee’s codeU.K.

Deduction and repayment of tax by reference to employee’s codeU.K.

21.—(1) On making a relevant payment to an employee during a tax year, an employer must deduct or repay tax in accordance with these Regulations by reference to the employee’s code, if the employer has one for the employee.

(2) The employer must deduct or repay tax by reference to the employee’s code, even if the code is the subject of an objection or appeal.

The cumulative basisU.K.

The cumulative basisU.K.

22.  An employer must deduct or repay tax on the cumulative basis, unless these Regulations provide otherwise.

Cumulative basis: deduction and repaymentU.K.

23.—(1) This regulation provides for deductions and repayments on the basis of total payments to date (the cumulative basis).

(2) In this regulation—

(a)TT is the total tax to date relating to an employee;

(b)UT is any tax not deducted because of the overriding limit when the last relevant payment was made to the employee, and is nil if the payment in question is the first relevant payment to the employee in any tax year;

(c)PT is the previous total tax to date relating to the employee, and is nil if the payment in question is the first relevant payment to the employee in any tax year.

(3) The employer must, before making any relevant payment to the employee, calculate TT.

(4) If TT + UT exceeds PT, the employer must deduct the excess from the relevant payment on making the payment.

(5) But ... the deduction is not to exceed the overriding limit, subject to 62(6) (notional payments).

(6) If TT + UT is less than PT, the employer must repay the difference to the employee on making the payment, subject to regulations 25(4) (extra payment made before main payment) and 64 (trade disputes).

(7) If TT + UT equals PT, the employer must neither deduct nor repay tax when making the payment.

(8) “Previous total tax to date” means the total tax to date corresponding to the employee’s total payments to date and the employee’s code—

(a)at the date of the last preceding relevant payment, or

(b)if later, at the date on which the employer complied with this regulation as if a relevant payment had been made.

(9) But—

(a)if the employee’s code is an amended code, and

(b)the employee’s previous code was not used on the cumulative basis,

“previous total tax to date” means the total net tax deducted by the employer.

(10) Paragraphs (2)(c), (8) and (9) are subject to regulations 43(9) and (10), 52(11) and (12), 53(4) and 61(4) (which modify the meaning of previous total tax to date in certain circumstances).

Cumulative basis: employee not paid weekly or monthlyU.K.

24.—(1) This regulation applies if—

(a)an employer normally makes main relevant payments to an employee at regular intervals which are longer than a week, other than monthly, and

(b)the employee’s code is used on the cumulative basis.

(2) The first main relevant payment in a tax year is treated for the purposes of calculating the deduction or repayment of tax as having been made at the end the period which—

(a)starts on the first day of the tax year, and

(b)finishes at the end of the employee’s normal regular payment interval.

(3) Subsequent main relevant payments in the tax year are treated for the purposes of calculating the deduction or repayment of tax as having been made at the end of the period which—

(a)starts the day after the date on which the previous main relevant payment is treated as having been made (by paragraph (2) or this paragraph), and

(b)finishes at the end of the employee’s normal regular payment interval or the last day of the tax year (if earlier).

(4) If the employee’s main relevant payments are normally made at regular intervals which are longer than a year, any such payment in a tax year is treated, for the purposes of calculating the deduction or repayment of tax, as made on the last day of that tax year.

(5) But, in every case, the employer must record the actual date of every payment in the deductions working sheet.

(6) This regulation does not apply if the payment falls within regulation 31(1) (payments in short payment periods).

Cumulative basis: subsidiary PAYE income of employee paid weekly or at greater intervalsU.K.

25.—(1) This regulation applies if—

(a)an employee’s main relevant payments are normally made at regular intervals of a week or more,

(b)the employee’s code is used on the cumulative basis, and

(c)the employer makes a payment in respect of overtime or other extra earnings (the “extra payment”).

(2) For the purposes of calculating the deduction or repayment of tax, the extra payment is treated as made on the same date as that on which the main relevant payment in the payment period is due to be paid or is due to be treated as paid by regulation 24 (employee not paid weekly or monthly).

(3) But paragraph (4) applies if the extra payment is actually made before the date on which the main relevant payment in the payment period is due to be paid (disregarding the effects of regulation 24).

(4) A repayment which would (but for this paragraph) be due under regulation 23(6) on making the extra payment must not be paid to the employee, but must instead be added to the previous total tax (as defined by regulation 23(8)) on making the next relevant payment.

(5) This regulation does not apply if the extra payment is made in a short payment period (but regulation 31 applies instead if that period contains an extra pay day).

(6) “Payment period”—

(a)in the case of an employee normally paid weekly, means a tax week,

(b)in the case of an employee normally paid monthly, means a tax month,

(c)in the case of an employee normally paid at other regular intervals, has the meaning given in paragraph (7).

(7) In the case mentioned in paragraph (6)(c)—

(a)the first payment period in a tax year starts on 6th April and finishes at the end of the employee’s normal regular payment interval, and

(b)subsequent payment periods in the tax year start the day after the end of the previous payment period and finish—

(i)at the end of the employee’s normal regular payment interval, or

(ii)on 5th April (if earlier).

(8) “Short payment period” means the last payment period in a tax year if, because of paragraph (7)(b)(ii), it is shorter than the previous payment periods.

(9) “Extra pay day” has the meaning given in regulation 31(4).

The non-cumulative basisU.K.

The non-cumulative basisU.K.

26.—(1) An employer must deduct tax in accordance with regulation 27 (the non-cumulative basis) from any relevant payment made to an employee if—

(a)the Inland Revenue direct, or

(b)these Regulations provide,

that the non-cumulative basis is to apply.

(2) If this regulation applies then regulation 22 (cumulative basis) does not apply.

Non-cumulative basis: general rule for deductionsU.K.

27.—(1) On making a relevant payment, the employer must deduct the amount of tax which would have been deductible in accordance with the appropriate tax tables, by reference to the employee’s code, if the payment had been made on the first day of the tax year.

(2) This is subject to—

Non-cumulative basis: modification of general ruleU.K.

28.—(1) Paragraphs (2) to (5) modify the general rule in regulation 27(1) (the non-cumulative basis) in certain circumstances.

(2) If regulation 30 (employee not paid weekly or monthly) applies to the employee’s main relevant payments, the employer must deduct from a relevant payment the amount of tax which would have been deductible, by reference to the employee’s code, if the payment (whether or not it is a main relevant payment) had been made on the date given by that regulation.

(3) If the employer does not normally make relevant payments to the employee at regular intervals, the employer must deduct from a relevant payment the amount of tax which would have been deductible, by reference to the employee’s code—

(a)if the payment is the first payment in the tax year, on the date it is made, or

(b)in any other case, on the date found by counting forward x days starting on 5th April, where x is the number of days found by starting with the date of the previous relevant payment and counting forward to the date of the payment in question.

(4) But if two or more relevant payments are made in the same tax week, the employer must deduct from the second or subsequent relevant payment the amount of tax which (subject to regulation 29(5)) would have been deductible, by reference to the employee’s code, if that payment were made at the date given by paragraph (3) for the first payment.

(5) ... the deduction is not to exceed the overriding limit, subject to regulation 62(6) (notional payments).

Non-cumulative basis: aggregation of paymentsU.K.

29.—(1) Paragraph (2) applies if—

(a)relevant payments are normally made to an employee at regular intervals of a week or more, and

(b)the employee’s code is used on the non-cumulative basis.

(2) If the relevant payment is the second or subsequent relevant payment made to the employee during the payment period (as defined by regulation 25(6)), the amount of tax to be deducted must be—

(a)calculated by reference to the aggregate of the relevant payments made to the employee during the payment period (as defined by regulation 25(6)),

(b)increased by any tax not deducted because of the overriding limit when the previous relevant payment in that payment period was made to the employee, and

(c)reduced by the amount of tax calculated when the employer made the previous relevant payment in that payment period.

(3) But, for the purposes of the aggregate, any effects of regulation 30(2) (regular payments treated as made at later date) must be disregarded.

(4) Paragraph (5) applies if relevant payments to an employee—

(a)are normally made at regular intervals of less than a week, or

(b)are made at irregular intervals of less than a week.

(5) If the relevant payment is the second or subsequent relevant payment made to the employee during a tax week, the amount of tax to be deducted must be—

(a)calculated by reference to the aggregate of the relevant payments made to the employee in the tax week,

(b)increased by any tax not deducted because of the overriding limit when the previous relevant payment in that tax week was made to the employee, and

(c)reduced by the amount of tax calculated when the employer made the previous relevant payment in that tax week.

Non-cumulative basis: employee not paid weekly or monthlyU.K.

30.—(1) This regulation applies if—

(a)an employer normally makes main relevant payments to an employee at regular intervals which are longer than a week, other than monthly, and

(b)the employee’s code is used on the non-cumulative basis.

(2) Each main relevant payment in a tax year is treated for the purposes of calculating the deduction of tax as having been made at the end the period which—

(a)starts on 6th April, and

(b)finishes at the end of the employee’s regular payment interval.

(3) If the employee’s main relevant payments are normally made at regular intervals which are longer than a year, any such payment in a tax year is treated, for the purposes of calculating the deduction of tax, as made on 5th April in that tax year.

(4) But, in every case, the employer must record the actual date of every payment in the deductions working sheet.

Payments in short payment periodsU.K.

31.—(1) An employer must deduct tax on the non-cumulative basis from any relevant payment made to an employee in a short payment period which includes an extra pay day, even if the employee’s code is normally used on the cumulative basis.

(2) Paragraph (1) does not apply if the employee’s code is the basic rate code.

(3) If—

(a)the employee’s total payments to date do not exceed the employee’s total free pay to date, and

(b)the employee’s code is normally used on the cumulative basis,

the employer must not deduct any tax from relevant payments made in a short payment period which includes an extra pay day.

(4) “Extra pay day” means the last day in a tax year on which a main relevant payment is due to be made to an employee if—

(a)the employee’s main relevant payments are normally made weekly or at greater intervals which results in the number of pay days varying from tax year to tax year (solely because of the number of days in a calendar year), and

(b)the day falls in a short payment period.

(5) “Short payment period” has the meaning given in regulation 25(8).

[F1Higher rate, additional rate and nil tax codes]U.K.

Higher rate code: deductionsU.K.

32.  If an employee’s code is the higher rate code the employer must deduct tax at the higher rate, and regulations 22 and 26 (cumulative and non-cumulative basis) do not apply.

[F2Additional rate code: deductionsU.K.

32A.  If the employee’s code is the additional rate code the employer must deduct tax at the additional rate and regulations 22 and 26 (cumulative and non-cumulative basis) do not apply.]

[F3Scottish upper rate codesU.K.

32B.—(1) If the employee’s code is an appropriate Scottish upper rate code the employer must deduct tax at the Scottish upper rate specified in that code and regulations 22 and 26 (cumulative and non-cumulative basis) do not apply.

(2) For the purposes of this regulation an “appropriate Scottish upper rate code” has the meaning given in regulation 7(4).]

Nil tax code: no deductions or repaymentsU.K.

33.—(1) If an employee’s code is the nil tax code the employer must not deduct or repay any tax, and so regulation 22 (cumulative basis) does not apply.

(2) But—

(a)if the nil tax code is an amended code, and

(b)the Inland Revenue so direct,

regulation 22 applies to the next relevant payment the employer makes in the same tax year, and the employer must make any repayment of tax due.

Simplified deduction schemeU.K.

Simplified deduction scheme for personal employeesU.K.

34.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Simplified deduction schemes: recordsU.K.

35.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cessation of employmentU.K.

Cessation of employment: Form P45U.K.

36.—(1) On ceasing to employ an employee in respect of whom a code has been issued, the employer must complete Form P45.

[F4(1A) If Part 3 of Form P45 is not available—

(a)the employer is not required to complete that Part of the Form, and

(b)where the employer does not complete that Part, any requirement, however expressed, in these Regulations which relates only to Part 3 does not apply.]

(2) The employer must then—

(a)send Part 1 of that form to the Inland Revenue [F5if the employer is one to whom paragraph (2A) applies], and

(b)provide Parts 1A, 2 and 3 to the employee,

on the day on which the employment ceases or, if that is not practicable, without unreasonable delay.

[F6(2A) This paragraph applies to—

(a)non-Real Time Information employers, and

(b)Real Time Information employers to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(3) Retirement on pension is not a cessation of employment for the purposes of this regulation if the PAYE pension income is paid by the same employer after retirement.

(4) The information listed in column 1 of Table 2 must, subject to the conditions set out in column 2, be provided in the various Parts of Form P45 as indicated in columns 3 to 5.

(5) This regulation is subject to regulations 38, 39 and 180 (death of employee etc).

[F8Income subject to retrospective tax provision — information to employeeU.K.

36A.—(1) This regulation applies if—

(a)a payment is made to an employee;

(b)the employment in connection with which it was paid ceases;

(c)the payment becomes a qualifying payment after the cessation of the employment;

(d)the tax year in which the payment was actually made is not closed, and

(e)the amount of the qualifying payment was not included in Form P45.

(2) If this regulation applies the person who made the payment must provide to the employee, without unreasonable delay after the relevant time, details of—

(a)the date on which the qualifying payment was actually made;

(b)the amount of the qualifying payment; and

(c)the amount of tax deducted under regulation 62(4) or (5).]

PAYE income paid after employment ceasedU.K.

37.—(1) This regulation applies if a relevant payment is made to an employee after the employment has ceased—

(a)by the former employer in respect of the former employment, or

(b)by any other person in respect of an obligation of the former employer,

and the payment has not been included in Form P45.

[F9(1A) But this regulation does not apply if regulation 37A applies.]

[F10(2) [F11The] person making the payment must deduct tax on the non-cumulative basis using the 0T Code.

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3) But—

(a)the payment does not affect the cessation of employment, and

(b)the provisions listed in paragraph (4) do not apply.

(4) The provisions are—

(5) The person making the payment must record the following information in a deductions working sheet (which the person must prepare for the purpose if one has not already been prepared for that tax year).

(6) The information is—

(a)the date of the payment,

(b)the amount of the relevant payment, and

(c)the amount of tax deducted on making the payment, or to be deducted or accounted for under regulation 62(4) or (5) (notional payments).

(7) The person making the payment must also notify the employee of the information mentioned in paragraph (6) without unreasonable delay.

[F14Income paid after cessation of employment subsequently becoming subject to PAYEU.K.

37A.—(1) This regulation applies if—

(a)a payment has been made, after the cessation of the employment, to a former employee—

(i)by the former employer, or

(ii)by any other person in respect of an obligation of the former employer;

(b)that payment becomes a qualifying payment after the employment ceased; and

(c)the amount of the qualifying payment has not been included in Form P45.

(2) Where a qualifying payment has been made in a closed year, the employer must deduct tax, from any other payment made to the former employee in the tax period at the relevant time—

(a)in accordance with the last code used for the tax year in which the qualifying payment was made, or

(b)if the employer has not been notified of a code for that tax year, at the [F15additional] rate of tax applicable for that year.

(3) Where a qualifying payment has been made in an open year, the employer must deduct tax from any other payment made to the former employee—

(a)in accordance with the code in force in the final tax period in which the employee was employed, or

(b)if the employer has not been notified of a code, at the [F16additional] rate of tax applicable for that year.

(4) Neither the making of the qualifying payment, nor its subsequently becoming taxable, affect the cessation of the employment, and the provisions listed in regulation 37(4) do not apply in relation that payment.

(5) The employer must record the following information in a deductions working sheet for the tax year in which that payment was made.

If a deductions working sheet has not already been prepared for that tax year, the employer must prepare one.

(6) The information is—

(a)the date on which the qualifying payment was actually made;

(b)the amount of that payment; and

(c)the amount of tax to be deducted or accounted for under regulation 62(4) or(5) (notional payments).

(7) The employer must also notify the employee of the information listed in paragraph (6) without unreasonable delay after the relevant time.]

Death of employeeU.K.

38.—[F17(A1) This regulation applies to—

(a)non-Real Time Information employers, and

(b)Real Time Information employers to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(1) On the death of an employee (other than a pensioner) in respect of whom a code has been issued by the Inland Revenue, the employer must—

(a)complete Form P45 indicating in Part 1 that the employee has died, and

(b)send it to the Inland Revenue.

(2) The employer must comply with paragraph (1)—

(a)on the day on which the employer learns of the employee’s death, or

(b)if that is not practicable, without unreasonable delay.

(3) The employer must, on making a relevant payment after learning of the employee’s death but before completing Form P45, deduct or repay tax as if the deceased employee were still alive and employed by the employer at the date of the payment.

(4) Regulation 37(2) to (6) applies to any relevant payment which—

(a)is made in respect of the employee’s employment after the date of the employee’s death, and

(b)is not included in Form P45.

Death of pensionerU.K.

39.—[F18(A1) This regulation applies to—

(a)non-Real Time Information pension payers, and

(b)Real Time Information pension payers to whom HMRC has given a notice requiring the pension payer to send to HMRC Form P45 or Form P46(Pen) on the commencement of a new pensioner’s pension.]

(1) On the death of a pensioner in respect of whom a code has been issued by the Inland Revenue, the pension payer must—

(a)complete Form P45 indicating in Part 1 that the pensioner has died, and

(b)send it to the Inland Revenue.

(2) The pension payer must comply with paragraph (1)—

(a)on the day on which the pension payer learns of the pensioner’s death, or

(b)if that is not practicable, without unreasonable delay.

(3) Paragraph (4) applies if the pension payer makes any relevant pension payments after the date of the pensioner’s death—

(a)before completing Form P45, or

(b)after completing Form P45 but during the tax year in which the pensioner died.

(4) The pension payer must, on making any such payment, deduct or repay tax as if the deceased pensioner were still alive and in receipt of a pension at the date of the payment.

(5) Regulation 37(2) to (6) applies to any relevant pension payment which—

(a)is made in a tax year following the tax year in which the pensioner died, and

(b)is not included in Form P45.

Employee’s duty to provide Form P45U.K.

Duty of employee to give new employer Form P45U.K.

40.—(1) An employee who has Parts 2 and 3 of Form P45 must give them to the new employer on commencing a new employment.

(2) If an employee receives Parts 2 and 3 of Form P45 after commencing a new employment, the employee must immediately give them to the new employer.

(3) [F19But paragraphs (4) and (6) apply] if an employee objects to the disclosure of the total payments to date to the new employer.

(4) [F20If the employer is a non-Real Time Information employer or a Real Time Information employer to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment, the] employee may, instead of complying with paragraph (1) or (2), send Parts 2 and 3 of Form P45 to the Inland Revenue before commencing the new employment or as soon as the employee receives Form P45 (as the case may be).

(5) The Inland Revenue—

(a)must then issue a code in respect of the employee to the new employer, and

(b)may direct that the non-cumulative basis is to apply to all relevant payments which the new employer makes to the employee.

[F21(6) If the employer is a Real Time Information employer, the employee need not comply with paragraphs (1) and (2).]

[F22Duty of employee to assist with completion of new employee fields in returns under regulations 67B and 67DU.K.

40A.—(1) An employee who commences employment with a Real Time Information employer must provide the information required to allow the employer to complete the new employee fields in the first return required by regulation 67B (real time returns of information about relevant payments) or 67D (exceptions to regulation 67B) which includes information in respect of the employee.

(2) The employer must verify the information given under paragraph (1) before making that return.

(3) In this regulation, “the new employee fields” means the information required under paragraphs 36 to 44 of Schedule A1.]

CHAPTER 2U.K.NEW EMPLOYEES (OTHER THAN PENSIONERS): FORMS P45 AND P46

Scope of Chapter 2U.K.

41.  This Chapter sets out the procedure to be followed for deductions and repayments (Form P45 and P46 procedure) in cases to which Chapter 3 (new pensioners: Forms P45 and P46) does not apply (see regulation 54).

Procedure if employer receives Form P45U.K.

42.—(1) This regulation applies—

(a)if an employee gives Parts 2 and 3 of Form P45 to the employer on commencing employment, and

(b)in the circumstances mentioned in regulation 51(2) (late presentation of Form P45: before employer required to send Form P46).

(2) The new employer must prepare a deductions working sheet and record on it the following information shown in Parts 2 and 3 of Form P45—

(a)the employee’s name,

(b)the employee’s national insurance number.

(3) If Parts 2 and 3 of Form P45 show that the earlier employment ended in the current tax year, the new employer must comply with regulation 43.

(4) If—

(a)Parts 2 and 3 of Form P45 show that the earlier employment ended in the previous tax year, and

(b)the new employment commences on or before 24th May,

the new employer must comply with regulation 44.

(5) If—

(a)Parts 2 and 3 of Form P45 show that the employment ended in the previous tax year, and

(b)the employment commences after 24th May,

the new employer must comply with regulation 45.

(6) If Parts 2 and 3 of Form P45 show that the employment ended in any earlier tax year, the new employer must comply with regulation 45.

[F23(6A) Paragraphs (7) and (8) apply if the employer is either—

(a)a non-Real Time Information employer, or

(b)a Real Time Information employer to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(7) In all cases the new employer must then insert in Part 3 of Form P45—

(a)the employer’s employer reference,

(b)the date on which the new employment commenced,

(c)any number used to identify the employee,

(d)the employee’s code in use by the employer if different from the code shown in Parts 2 and 3 of Form P45,

(e)any figure recorded in accordance with paragraph (5)(c) or (6)(c) of regulation 43 (Form P45 for current tax year), if different from the total tax to date shown on Parts 2 and 3 of Form P45,

(f)the employee’s address,

(g)the employee’s date of birth, ...

[F24(ga)the employee’s sex,]

(h)the employee’s job title or description,

(i)the employer’s name, and

(j)the employer’s address.

(8) The employer must then send Part 3 of Form P45 to the employer’s Inland Revenue office.

Form P45 for current tax yearU.K.

43.—(1) The new employer must record in the deductions working sheet the code shown in Parts 2 and 3 of Form P45 as the employee’s code.

(2) Paragraphs (3) to (10) apply if Parts 2 and 3 of Form P45 show that the cumulative basis was used.

(3) The employer must record in the deductions working sheet the total payments to date (if any) shown in Parts 2 and 3 of Form P45.

(4) The employer must record in the deductions working sheet the following additional information, or keep such records as enable its production.

(5) If the code shown in Parts 2 and 3 of Form P45 is a K code, the additional information is—

(a)the total additional pay to date,

(b)the total taxable payments to date, and

(c)the lower of the total tax to date as at the week or month shown in Parts 2 and 3 of Form P45 and the total net tax deducted shown in it.

(6) In any other case, the additional information is—

(a)the total free pay to date,

(b)the total taxable payments to date, and

(c)the corresponding total tax to date as at the week or month shown in Parts 2 and 3 of Form P45.

(7) The amounts required by paragraphs (5)(a) and (b) and (6)(a) and (b) must be arrived at by the employer by reference to the information shown in Parts 2 and 3 of Form P45.

(8) On making any relevant payment to the employee, the employer must deduct or repay tax by reference to the employee’s code on the cumulative basis.

(9) For the purposes of—

(a)paragraph (8), and

(b)item 8 of Table 2 in regulation 36(4) (Form P45), and

(c)regulation 55(4)(f) [F25(Form P46(Pen))],

the total payments to date recorded in the deductions working sheet in accordance with paragraph (3), and the figure recorded in accordance with paragraph (5)(c) or (6)(c) must be treated as if they were relevant payments made to the employee by, and tax deducted by, the new employer.

(10) For the purposes of regulation 23(8) (cumulative basis: meaning of previous total tax to date) the figure recorded in accordance with paragraph (5)(c) or (6)(c) must be treated as the previous total tax to date when the employer next makes a relevant payment to the employee.

(11) If Parts 2 and 3 of Form P45 show that the non-cumulative basis has been used, on making any relevant payment to the employee the employer must, subject to regulation 32 (higher rate code: deductions), deduct or repay tax by reference to the employee’s code on the non-cumulative basis.

(12) The receipt by the employer of Parts 2 and 3 of Form P45 is treated as the issue by the Inland Revenue of the code shown in Parts 2 and 3 of Form P45 as the code for use in respect of the employee.

Form P45 for previous tax year: employment starting on or before 24th MayU.K.

44.—(1) The new employer must—

(a)record in the deductions working sheet the code shown in Parts 2 and 3 of Form P45 as the employee’s code, and

(b)deduct or repay tax by reference to that code on the cumulative basis, subject to regulation 32 (higher rate code: deductions).

(2) The receipt by the employer of Parts 2 and 3 of Form P45 is treated as the issue by the Inland Revenue of the code shown in Parts 2 and 3 of Form P45 as the code for use in respect of the employee.

Other Forms P45U.K.

45.—(1) The new employer must—

(a)record in the deductions working sheet the emergency code as the employee’s code, and

(b)deduct tax from each relevant payment using the emergency code on the non-cumulative basis.

(2) The emergency code is treated as having been issued to the employer by the Inland Revenue as the code for use in respect of the employee.

[F26Application of regulations 46 to 49E: Real Time Information employers and non-Real Time Information employersU.K.

45A.—(1) Regulations 46 to 49 (procedure where no Form P45) apply in relation to—

(a)non-Real Time Information employers, and

(b)Real Time Information employers to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.

(2) Regulations 49A to 49E (procedure where employee fails to assist with completion of new employee fields or no Form P45) apply in relation to Real Time Information employers other than those within paragraph (1)(b).]

Form P46 where employer does not receive Form P45 and code not knownU.K.

46.—(1) This regulation applies if—

(a)an employee commences employment without giving the employer Parts 2 and 3 of Form P45, and

(b)a code in respect of the employee has not otherwise been issued to the employer.

[F27(1A) The employee must provide the following information in Form P46.

(1B) The information is —

(a)the employee’s national insurance number (if known),

(b)the employee’s full name,

(c)the employee’s sex,

(d)the employee’s date of birth, and

(e)the employee’s full address including postcode.

[F28A seconded expatriate who is a national of an EEA state (see section 56(3)(za) of ITA) ... must provide confirmation of this as additional information.]]

(1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The employee must indicate in Form P46 which ... of the following statements [F29applies]—

• [F30Statement A: that the employment referred to in paragraph (1)(a) is the employee’s first employment since the preceding 6^th April, and the employee has not since that date received—

  (a)

  jobseeker’s allowance [F31, incapacity benefit or employment and support allowance] which is subject to income tax, or

  (b)

  a retirement pension or an occupational pension;

  Statement B: that the employee is not receiving a retirement pension or an occupational pension and since the preceding 6^th April—

  (a)

  has had another employment, but is not now in receipt of employment income from it, or

  (b)

  has received jobseeker’s allowance [F31, incapacity benefit or employment and support allowance] which is subject to income tax, but payment of that allowance or benefit has ceased;

  Statement C: that the employee either has another employment (which is continuing) or is in receipt of a retirement pension or an occupational pension.]

...

[F32A seconded expatriate must indicate instead which of the following statements applies—

Statement A: the employee intends to live in the United Kingdom for [F33183 days or more];

Statement B: the employee intends to live in the United Kingdom for less than [F34183 days];

Statement C: the employee will work both inside and outside the United Kingdom, but will live outside.]

[F35(2A) A Form P46 must be—

(a)signed by the employee; or

(b)delivered by the employer by an approved method of electronic communications after he has complied with paragraph (2B).

(2B) To the extent that the information contained in it relates to the employee, the employer must verify the content of a Form P46 before it is delivered.

(2C) If, despite the requirements of paragraphs (2) to (2B), a Form P46 is sent or delivered to an officer of Revenue and Customs without the requirements of those paragraphs being satisfied, the employer must deduct tax [F36on the non-cumulative basis using code 0T] from the employee’s earnings.]

[F37(3) The employer must provide the following information in the Form P46—

(a)the date on which the employment started;

(b)the employee’s works payroll number and the department or branch (if any) in which the employee is employed;

(c)the title of the job;

(d)the employer’s PAYE reference;

(e)the employer’s name;

(f)the employer’s full address, including the postcode; and

(g)the tax code used in relation to the employee’s earnings.]

(4) The employer must keep the Form P46 until required to send it to the Inland Revenue in accordance with regulations 47 to 49.

(5) Before sending the Form P46, the employer must indicate in the Form which code is being used in respect of the employee and whether it is being used on the non-cumulative basis.

(6) For the purposes of paragraph (1)(b), the employer must ignore any code issued to the employer in respect of an employee’s earlier employment which has ceased.

(7) This regulation ceases to apply in the circumstances mentioned in regulation [F3851(2)(a)] (late presentation of Form P45: before employer required to send Form P46).

[F39Procedure in Form P46 cases: (a) seconded expatriate is national of EEA state or Commonwealth citizen, or (b) employee is not seconded expatriate and Statement A applies]U.K.

47.—[F40(1) This regulation applies in the case of an employee [F41(not a seconded expatriate)] who indicates that Statement A applies.

[F41It also applies to a seconded expatriate who confirms being a national of an EEA state ... (see regulation 46(1B)).]]

(2) On making the first relevant payment which [F42equals or exceeds the lower earnings limit] to the employee, the employer must—

[F43(a)send the Form P46 to Her Majesty’s Revenue and Customs,]

(b)prepare a deductions working sheet and enter the total payments to date, and

(c)deduct tax on the cumulative basis using the emergency code.

[F44(2A) To comply with paragraph (2)(a)—

(a)the employer must send the Form P46 to Her Majesty’s Revenue and Customs even if the employee has not provided all of the information required by regulation 46, and

(b)the employer must provide any of the information required by regulation 46(1B) that the employee has not provided.]

(3) On making any subsequent relevant payment before the Inland Revenue issue a code for use in respect of the employee, the employer must continue to deduct or repay tax on the cumulative basis using the emergency code.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F45Procedure in Form P46 cases: (a) Statement B applies (not seconded expatriate), or (b) Statement B or C applies (seconded expatriate)]U.K.

48.—(1) This regulation applies in the case of an employee [F46(not a seconded expatriate)] who indicates in the Form P46 that ... Statement B applies.

[F46It also applies in the case of a seconded expatriate who indicates in the Form P46 that Statement B or C applies.]

(2) On making the first relevant payment which [F47equals or exceeds the lower earnings limit] to the employee, the employer must—

[F48(a)send the P46 to Her Majesty’s Revenue and Customs,]

(b)prepare a deductions working sheet and enter the total payments to date, and

(c)deduct tax on the non-cumulative basis using the emergency code.

[F49(2A) To comply with paragraph (2)(a)—

(a)the employer must send the Form P46 to Her Majesty’s Revenue and Customs even if the employee has not provided all of the information required by regulation 46, and

(b)the employer must provide any of the information required by regulation 46(1B) that the employee has not provided.]

(3) On making any subsequent relevant payment before the employee’s code is issued, the employer must continue to deduct or repay tax on the non-cumulative basis using the emergency code.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F50Procedure in Form P46 cases: (a) Statement C applies (not seconded expatriate), or (b) Statement A applies (seconded expatriate)...]U.K.

49.—(1) This regulation applies in any case which is not dealt with by regulation 47 or 48 which concerns an employee to whom regulation 46(1) applies.

(2) On making the first relevant payment to the employee, the employer must—

[F51(a)send the Form P46 to Her Majesty’s Revenue and Customs,]

(b)prepare a deductions working sheet and enter both the total payments to date and the total tax to date before the first payment as nil,

(c)deduct tax on the cumulative basis using the basic rate code.

[F52(2A) To comply with paragraph (2)(a)—

(a)the employer must send the Form P46 to Her Majesty’s Revenue and Customs even if the employee has not provided all of the information required by regulation 46, and

(b)the employer must provide any of the information required by regulation 46(1B) that the employee has not provided.]

(3) On making any subsequent relevant payment before the employee’s code is issued, the employer must continue to deduct tax on the cumulative basis using the basic rate code.

[F53(4) In the case of a seconded expatriate, the emergency code must be used instead of the basic rate code mentioned in paragraphs (2)(c) and (3) (see also regulation 7(3) about the codes).]

[F54Procedure where employee fails to assist with completion of new employee fields in returns under regulations 67B and 67DU.K.

49A.—(1) If, despite the requirements of regulation 40A(1) and (2) (duty of employee to assist with completion of new employee fields in returns under regulations 67B and 67D) and regulations 67B (real time returns of information about relevant payments) and 67D (exceptions to regulation 67B), a return is sent to HMRC under those regulations without the new employee fields being completed in respect of the employee, the employer must deduct tax on the non-cumulative basis using code 0T.

(2) In paragraph (1), “the new employee fields” has the same meaning as in regulation 40A.

Procedure where no Form P45 and code not known: application of regulations 49C to 49EU.K.

49B.—(1) Regulations 49C to 49E (procedure where no Form P45) apply if—

(a)regulation 49A does not apply,

(b)an employee commences employment without giving the employer Parts 2 and 3 of Form P45 and the circumstances mentioned in regulation 51(2)(b) (late presentation of Form P45) do not apply, and

(c)a code in respect of the employee has not otherwise been issued to the employer.

(2) For the purposes of paragraph (1)(c), the employer must ignore any code issued to the employer in respect of an employee’s earlier employment which has ceased.

Procedure where no Form P45 and: (a) employee is not a seconded expatriate and paragraph 41(a) of Schedule A1 applies; or (b) seconded expatriate is national of EEA stateU.K.

49C.—(1) This regulation applies where—

(a)the employee is not a seconded expatriate and has indicated in accordance with regulation 40A(1) (duty of employee to assist with completion of new employee fields in returns under regulations 67B and 67D) that the statement in paragraph 41(a) of Schedule A1 (real time returns) is correct, or

(b)the employee is a seconded expatriate and has confirmed in accordance with regulation 40A(1) being a national of an EEA state.

(2) On making the first relevant payment which equals or exceeds the lower earnings limit to the employee, the employer must—

(a)prepare a deductions working sheet and enter the total payments to date, and

(b)deduct tax on the cumulative basis using the emergency code.

(3) On making any subsequent relevant payment before HMRC issue a code for use in respect of the employee, the employer must continue to deduct or repay tax on the cumulative basis using the emergency code.

Procedure where no Form P45 and: (a) employee is not a seconded expatriate and paragraph 41(b) of Schedule A1 applies; or (b) employee is a seconded expatriate and paragraph 43(b) or 43(c) of Schedule A1 appliesU.K.

49D.—(1) This regulation applies where—

(a)the employee is not a seconded expatriate and has indicated in accordance with regulation 40A(1) that the statement in paragraph 41(b) of Schedule A1 is correct, or

(b)the employee is a seconded expatriate to whom regulation 49C does not apply and has indicated in accordance with regulation 40A(1) that the statement in paragraph 43(b) or 43(c) of Schedule A1 is correct.

(2) On making the first relevant payment which equals or exceeds the lower earnings limit to the employee, the employer must—

(a)prepare a deductions working sheet and enter the total payments to date, and

(b)deduct tax on the non-cumulative basis using the emergency code.

(3) On making any subsequent relevant payment before the employee’s code is issued, the employer must continue to deduct or repay tax on the non-cumulative basis using the emergency code.

Procedure where no Form P45 and: (a) employee is a not seconded expatriate and paragraph 41(c) of Schedule A1 applies; or (b) employee is a seconded expatriate and paragraph 43(a) of Schedule A1 appliesU.K.

49E.—(1) This regulation applies in any case which is not dealt with by regulation 49C or 49D.

(2) On making the first relevant payment to the employee, the employer must—

(a)prepare a deductions working sheet and enter both the total payments to date and the total tax to date before the first payment as nil,

(b)deduct tax on the cumulative basis using the basic rate code.

(3) On making any subsequent relevant payment before the employee’s code is issued, the employer must continue to deduct tax on the cumulative basis using the basic rate code.

(4) In the case of a seconded expatriate, the emergency code must be used instead of the basic rate code mentioned in paragraphs (2)(b) and (3).]

[F55No Form P45: code treated as issued by HMRC]U.K.

50.—(1) [F56Code 0T, the] emergency code or the basic rate code used by the employer in accordance with regulations [F5746] to [F5849E] is treated, for the purposes of Parts 2 to 4 (codes; deduction and repayment of tax; payments, returns and information) as having been issued by the Inland Revenue as the code for use in respect of the employee.

(2) This does not apply for the purposes of regulation 18 (objections and appeals) and regulations 46 to [F5849E] and 51 to 53 (... late presentation of Form P45).

[F59Procedure in cases of retrospective earnings: code treated as issued by HMRCU.K.

50A.—(1) If—

(a)as a result of a retrospective tax provision, a qualifying payment was made in a year (whether open or closed) to a person, and

(b)a code has never been issued to the employer in respect of employment with whom that qualifying payment was made,

paragraph (2) applies.

(2) Where this paragraph applies the higher rate code applicable to the year in which the qualifying payment was made is treated, for the purposes of Parts 2 to 4 (codes, deduction and repayment of tax, payments, information and returns) as having been issued by HMRC as the code for use in respect of the employee in relation to that year.

(3) Paragraph (2) does not apply for the purposes of regulation 18 (objections and appeals) and regulations 46 to [F6049E] and 51 to 53 (Form P46 procedure and late presentation of Form P45).]

Late presentation of Form P45U.K.

51.—(1) This regulation applies if an employee gives Parts 2 and 3 of Form P45 to the employer after commencing employment.

[F61(2) If the employee gives Parts 2 and 3 of Form P45 to the employer before, as the case may be—

(a)the employer is required to send Form P46 to HMRC under regulations 47 to 49, or

(b)the employer is required to send the first return in relation to the employee under regulation 67B (real time returns of information about relevant payments) or 67D (exceptions to regulation 67B) to HMRC,

regulation 42 (procedure if employer receives Form P45) applies.]

(3) If the employee gives Parts 2 and 3 of Form P45 to the employer—

[F62(a)after, as the case may be—

(i)Form P46 is required to have been sent to HMRC, or

(ii)the employer is required to send the first return in relation to the employee under regulation 67B or 67D to HMRC,

but]

(b)before the employee’s code has been issued to the employer,

this regulation and regulation 52 (late presentation of Form P45: employer’s duties) apply.

(4) If the employee gives Parts 2 and 3 of Form P45 to the employer after the employee’s code has been issued to the employer, they must be destroyed.

(5) If Parts 2 and 3 of Form P45 show that the employment ended in the current tax year then, unless the employer has already ceased to employ the employee—

(a)the code shown in Parts 2 and 3 of Form P45 is treated as having been issued by the Inland Revenue to the employer on the day the employee gives them to the employer, and

(b)the employer must comply with regulation 52.

(6) If Parts 2 and 3 of Form P45 show that the employment ended in the previous tax year and the employee gives them to the employer on or before 24th May then, unless the employer has already ceased to employ the employee—

(a)the code shown in Parts 2 and 3 of Form P45 is treated as having been issued by the Inland Revenue to the employer on the day the employee gives them to the employer,

(b)the employer must deduct or repay tax by reference to that code using the cumulative basis, subject to regulation 32 (higher rate code: deductions), and

(c)the employer must comply with paragraphs (2) and (3) of regulation 52.

(7) Parts 2 and 3 of Form P45 must be destroyed—

(a)if they show that the employment ended in the previous tax year and the employee gives them to the employer after 24th May, or

(b)if they show that the employment ended in an earlier tax year.

Late presentation of Form P45: employer’s dutiesU.K.

52.—(1) This regulation applies in the circumstances mentioned in regulation 51(5); and paragraphs (2) and (3) of this regulation also apply in the circumstances mentioned in regulation 51(6).

[F63(1A) Paragraphs (2) and (3) apply if the employer is either—

(a)a non-Real Time Information employer, or

(b)a Real Time Information employer to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(2) The employer must insert in Part 3 of Form P45—

(a)the employer’s employer reference,

(b)the date on which the new employment commenced,

(c)any number used to identify the employee,

(d)the employee’s code in use by the employer if different from the code shown in Parts 2 and 3 of Form P45,

(e)if Parts 2 and 3 of the Form P45 show that the cumulative basis has been used, the figure (if any) recorded in accordance with paragraph (7)(c) or (8)(c) if different from the total tax to date shown on Parts 2 and 3 of Form P45,

(f)the employee’s address,

(g)the employee’s date of birth, ...

[F64(ga)the employee’s sex,]

(h)the employee’s job title or description,

(i)the employer’s name, and

(j)the employer’s address.

(3) The employer must then send Part 3 of Form P45 to the employer’s Inland Revenue office.

(4) The employer must prepare a deductions working sheet (unless the employer has already prepared one) in accordance with the following information shown in Parts 2 and 3 of Form P45—

(a)the employee’s name,

(b)the employee’s national insurance number, and

(c)the employee’s code.

(5) The employer must record in the deductions working sheet the sum of—

(a)the total payments to date (if any) shown in Parts 2 and 3 of Form P45, and

(b)the relevant payments which have been made by the employer since the employment commenced which have not already been recorded in the deductions working sheet.

(6) If Parts 2 and 3 of Form P45 show that the cumulative basis has been used, the employer must also record the following additional information in the deductions working sheet, or keep such records as enable its production.

(7) If the code shown in Parts 2 and 3 of Form P45 is a K code, the additional information is—

(a)the total additional pay to date,

(b)the total taxable payments to date, and

(c)the lower of the total tax to date as at the week or month shown in Parts 2 and 3 of Form P45 or the total net tax deducted shown in it.

(8) In any other case, the additional information is—

(a)the total free pay to date,

(b)the total taxable payments to date, and

(c)the corresponding total tax to date as at the week or month shown in Parts 2 and 3 of Form P45.

(9) The employer must ascertain the amounts required by paragraphs (7)(a) and (b) and (8)(a) and (b) by reference solely to the information shown in Parts 2 and 3 of Form P45.

(10) If Parts 2 and 3 of Form P45 show that the cumulative basis has been used, the employer, on making any subsequent relevant payment to the employee, must deduct or repay tax by reference to the code shown in Parts 2 and 3 of Form P45 on the cumulative basis.

(11) For the purposes of—

(a)paragraph (10), and

(b)item 8 of Table 2 in regulation 36(4) (Form P45), and

(c)regulation 55(4)(f) [F65(Form P46(Pen))],

the total payments to date recorded in the deductions working sheet in accordance with paragraph (5) and the figure recorded in accordance with paragraph (7)(c) or (8)(c) must be treated as if they were relevant payments made to the employee by, and tax deducted by, the new employer.

(12) For the purposes of regulation 23(8) (cumulative basis: meaning of previous total tax to date), the figure recorded in accordance with paragraph (7)(c) or (8)(c) must be added to any actual previous total tax to date, and the total treated as the previous total tax to date when the employer next makes a relevant payment to the employee.

(13) If Parts 2 and 3 of Form P45 show that the non-cumulative basis has been used, on making any relevant payment to the employee, the employer must, subject to regulation 32 (higher rate code: deductions), deduct tax by reference to the code shown in Parts 2 and 3 of Form P45 on the non-cumulative basis.

[F66No Form P45: subsequent procedure on issue of employee’s code]U.K.

53.—(1) On making any relevant payment to an employee falling within regulation 47 to [F6749E (procedure where no Form P45)] after the Inland Revenue have issued a code to the employer for use in respect of the employee, the employer must deduct or repay tax by reference to that code.

(2) For the purposes of paragraph (1) and regulation 66 (deductions working sheets)—

(a)any total payments to date notified to the employer by the Inland Revenue are treated as if they represented relevant payments made by the employer; and

(b)the total net tax deducted before the first payment made in accordance with this regulation is taken to be the sum of—

(i)the total net tax deducted, if any, notified to the employer by the Inland Revenue, and

(ii)any tax which the employer was liable to deduct from the employee’s relevant payments under regulation 47, 48 [F68, 49, 49C, 49D or 49E].

(3) For the purposes of—

(a)item 8 of Table 2 in regulation 36(4) (Form P45), and

(b)regulation 55(4)(f) [F69(Form P46(Pen))],

any total payments to date and total net tax deducted which are notified to the employer by the Inland Revenue must be treated as if they were relevant payments made to the employee by, and tax deducted by, the employer.

(4) If the employee’s previous code was used on the cumulative basis, any amount notified to the employer under paragraph (2)(b)(i) must be added to the previous total tax to date for the purposes of regulation 23(8) (cumulative basis: meaning of previous total tax to date).

CHAPTER 3U.K.[F70NEW PENSIONERS: FORMS P45 AND P46(PEN)]

Scope of Chapter 3U.K.

[F7154.  This Chapter applies (instead of Chapter 2) when a pension starts and either—

(a)the pensioner will be continuing in employment and will be receiving relevant pension payments in addition to relevant payments from their employer, or

(b)the pensioner will not be receiving relevant payments other than relevant pension payments.]

[F72Application of this Chapter to Real Time Information pension payersU.K.

54ZA.—(1) Any requirement in this Chapter to complete (howsoever expressed) and send to HMRC Part 3 of Form P45 or Form P46(Pen) applies only to—

(a)non-Real Time Information pension payers, and

(b)Real Time Information pension payers to whom HMRC has given a notice requiring the pension payer to send to HMRC Form P45 or Form P46(Pen) on the commencement of a new pensioner’s pension.

(2) Paragraph (1) is without prejudice to the requirement in regulation 55(3)(b) (PAYE pension income paid by former employer) to complete and give Form P46(Pen) to the pensioner.]

[F73Relevant pension payments and relevant payments being received by a pensionerU.K.

54A.—(1) This regulation applies if the pensioner begins to receive relevant pension payments whilst continuing to receive relevant payments from their employer.

(2) On making relevant pension payments to the pensioner, the pension payer must deduct tax on the non-cumulative basis using the 0T tax code.

(3) The pension payer must send to HMRC the following information in the Form P46(Pen)—

(a)the pensioner’s national insurance number, if known,

(b)the pensioner’s full name,

(c)the pensioner’s sex,

(d)the pensioner’s date of birth,

(e)the pensioner’s full address including postcode,

(f)the date upon which the pension payments started,

(g)the pensioner’s work payroll number and the department or branch (if any) in which the pensioner is employed,

(h)confirmation that the recipient of the relevant payments is a pensioner,

(i)the pension payer’s PAYE reference,

(j)the pension payer’s name,

(k)the pension payer’s full address including postcode, and

(l)the tax code used in relation to the pension.

(4) Before sending the Form P46(Pen), the pension payer must indicate in the form that code 0T is being used on a non-cumulative basis in respect of the pension.

[F74Procedure in regulation 54A cases: code treated as issued by HMRC]U.K.

54B.—(1) The 0T code used by the pension payer in accordance with regulation 54A is treated, for the purposes of Parts 2 to 4 (codes; deduction and repayment of tax; payments, returns and information), as having been issued by HMRC as the code for use in respect of the pensioner.

(2) This does not apply for the purposes of regulation 18 (objections and appeals) and regulations 58, 60 and 61 ... late presentation of Form P45 etc).]

PAYE pension income paid by former employerU.K.

55.—(1) This regulation applies if the pension payer was, immediately before the pensioner’s retirement, the pensioner’s employer and so, in accordance with regulation 36(3), no Form P45 was completed.

(2) On making relevant pension payments to the pensioner, the pension payer must deduct tax on the non-cumulative basis, subject to regulation 32 (higher rate code: deductions), for the remainder of the tax year in which the pension starts or until directed otherwise by the Inland Revenue.

(3) Within 14 days after the pensioner’s retirement, the pension payer must prepare a [F75Form P46(Pen)] and—

(a)send it to the Inland Revenue, and

(b)give [F76a copy of the information] to the pensioner.

(4) The [F75Form P46(Pen)] must contain the following information—

(a)the pensioner’s name,

(b)the pensioner’s address, ...

[F77(ba)the pensioner’s date of birth,

(bb)the pensioner’s sex,]

(c)the pensioner’s national insurance number, if known,

(d)the pension payer’s PAYE reference,

(e)the date of retirement,

(f)the total payments to date at the date of retirement,

(g)the total payments to date relating to the employment in question at the date of retirement,

(h)the total net tax deducted corresponding to the total payments to date relating to the employment in question,

(i)the amount of pension payable [F78annually],

(j)any number used to identify the pensioner,

(k)whether the pensioner’s code is use on the cumulative basis,

(l)the pension payer’s name, and

(m)the pension payer’s address.

(5) Paragraph (4) is subject to regulation 212 (modifications for electronic version of [F75Form P46(Pen)] ...).

PAYE pension income paid by other pension payerU.K.

56.—(1) This regulation applies if the pensioner gives Parts 2 and 3 of Form P45 to the pension payer when a pension starts.

(2) The pension payer must insert in Part 3 of Form P45—

(a)the pensioner’s address,

(b)any number used to identify the pensioner, ...

(c)the date on which the pension started.

[F79(d)the pensioner’s date of birth, and

(e)the pensioner’s sex.]

(3) The pension payer must then send Part 3 of Form P45 to the pension payer’s Inland Revenue office.

(4) The receipt by the pension payer of Parts 2 and 3 of Form P45 under paragraph (1) is treated as the issue by the Inland Revenue of the code shown in Parts 2 and 3 of Form P45 as the code for use in respect of the pensioner.

(5) On making relevant pension payments to the pensioner, the pension payer must, subject to regulation 32 (higher rate code: deductions), deduct or repay tax—

(a)on the non-cumulative basis, for the remainder of the tax year to which Parts 2 and 3 of Form P45 relate;

(b)on the cumulative basis, for subsequent tax years.

(6) Paragraph (5) applies until the pension payer is directed otherwise by the Inland Revenue.

[F80Information to be provided in Form P46(Pen) if code not known: non UK residents]U.K.

57.—(1) This regulation applies if a pension payer pays a pension, which does not arise wholly from an employment carried on abroad, to a pensioner—

(a)who is not resident in the United Kingdom,

(b)who has not given Parts 2 and 3 of Form P45 to the pension payer, and

(c)in respect of whom a code has not otherwise been issued by the Inland Revenue.

(2) On making the first payment which exceeds the PAYE threshold, the pension payer must send to the Inland Revenue the following information in [F81Form P46(Pen)].

[F82(3) The information is—

(a)the pensioner’s national insurance number (if known),

(b)the pensioner’s full name,

(c)the pensioner’s sex,

(d)the pensioner’s date of birth,

(e)the pensioner’s full address including postcode,

(f)date upon which payment of the pension started,

(g)the pensioner’s works payroll number and the department or branch (if any),

(h)the fact that the recipient is a pensioner,

(i)the pension payer’s PAYE reference,

(j)the pension payer’s name,

(k)the pension payer’s full address, including the postcode.]

(4) For the purposes of paragraph (1)(c), the pension payer must ignore any code issued to the pension payer in respect of a previous pension of the pensioner which has ended.

[F83Procedure if no Form P45 and code not known: UK pensioners]U.K.

58.—(1) This regulation applies if—

(a)a pension payer starts to make relevant pension payments to a pensioner,

(b)the pensioner is resident in the United Kingdom,

(c)the pensioner does not give to the pension payer Parts 2 and 3 of Form P45, and

(d)a code in respect of the pensioner has not otherwise been issued to the pension payer.

[F84(1A) This regulation does not apply where the relevant pension payment is a relevant lump sum payment.]

(2) On making any relevant pension payments to the pensioner before the Inland Revenue issue a code for use in respect of the pensioner, the pension payer must deduct tax on the non-cumulative basis applying the emergency code.

(3) The pension payer must send the Inland Revenue the following information in [F85Form P46(Pen)].

[F86(4) The information is—

(a)the pensioner’s national insurance number (if known),

(b)the pensioner’s full name,

(c)the pensioner’s sex,

(d)the pensioner’s date of birth,

(e)the pensioner’s full address including postcode,

(f)date upon which payment of the pension started,

(g)the pensioner’s works payroll number and the department or branch (if any),

(h)the fact that the recipient is a pensioner,

(i)the pension payer’s PAYE reference,

(j)the pension payer’s name,

(k)the pension payer’s full address, including the postcode, and

(l)the tax code used in relation to the pension.]

(5) The pension payer must also indicate in the Form that the emergency code is being used on the non-cumulative basis.

(6) For the purposes of paragraph (1)(d), the pension payer must ignore any code issued to the pension payer in respect of a previous pension of the pensioner which has ended.

[F87(7) In this regulation, and in regulation 58A (procedure if no Form P45 and code not known where payment is a relevant lump sum payment), a “relevant lump sum payment” is [F88a payment which]—

[F89(a)is treated as taxable pension income under—

(i)section 637G of ITEPA (trivial commutation lump sums and winding-up lump sums), or

(ii)section 637N of that Act (trivial commutation lump sum death benefits), and]

(b)F90... is made at a time when the pension payer is not making any other payments of PAYE pension income to the pensioner under the same registered pension scheme.]

[F91Procedure if no Form P45 and code not known where payment is a relevant lump sum paymentU.K.

58A.—(1) This regulation applies if—

(a)a pension payer makes a payment of a relevant lump sum payment,

(b)the pensioner is resident in the United Kingdom,

(c)the pensioner does not give to the pension payer Parts 2 and 3 of Form P45, and

(d)a code in respect of the pensioner has not otherwise been issued to the pension payer.

(2) On making a relevant lump sum payment to the pensioner before HMRC issue a code for use in respect of the pensioner, the pension payer must deduct tax using the basic rate code on the non-cumulative basis.

(3) Where the pension payer is one to whom paragraph (6) applies on the day on which the relevant lump sum payment is made, or if that is not practicable, without unreasonable delay, the pension payer must complete Form P45 and provide—

(a)Part 1 of Form P45 to HMRC, and

(b)Parts 1A, 2 and 3 to the pensioner.

(4) Where paragraph (6) does not apply, on the day on which the relevant lump sum payment is made, or if that is not practicable, without unreasonable delay, the pension payer must complete and provide Parts 1A, 2 and 3 of Form P45 to the pensioner.

(5) The information listed in rows 1 to 6, and 10 to 16 of column 1 of Table 2 to regulation 36 must, subject to the conditions set out in column 2, be provided in the various Parts of Form P45 as indicated in columns 3 to 5, as if—

(a)references to “employer” were to “pension payer”, and

(b)references to “employee” were to “pensioner.

(6) This paragraph applies to—

(a)a pension payer who is a non-Real Time Information pension payer, and

(b)a Real Time Information pension payer to whom HMRC has given a notice requiring the pension payer to send to HMRC Form P45.]

UK resident pensioner’s code treated as issued by Inland RevenueU.K.

59.—(1) The emergency code used by the pension payer in accordance with regulation 58 is treated, for the purposes of Parts 2 to 4 (codes; deduction and repayment of tax; payments, returns and information) as having been issued by the Inland Revenue as the code for use in respect of the pensioner.

(2) This does not apply for the purposes of regulation 18 (objections and appeals) and regulations 58, 60 and 61 (... late presentation of Form P45 etc).

Late presentation of Form P45U.K.

60.—(1) Paragraphs (2) to (6) apply if the pensioner gives Parts 2 and 3 of Form P45 to the pension payer after the pension has started but before a code has been issued.

(2) The pension payer must insert in Part 3 of Form P45—

(a)the pensioner’s address,

(b)any number used to identify the pensioner, and

(c)the date on which the pension started.

(3) The pension payer must then send Part 3 of Form P45 to the pension payer’s Inland Revenue office.

(4) The receipt by the pension payer of Parts 2 and 3 of Form P45 under paragraph (1) is treated, except for the purposes of paragraph (1), as the issue by the Inland Revenue of the code shown in that Form as the pensioner’s code.

(5) On making relevant pension payments to the pensioner, the pension payer must, subject to regulation 32 (higher rate code: deductions), deduct or repay tax—

(a)on the non-cumulative basis, for the remainder of the tax year to which Parts 2 and 3 of Form P45 relate;

(b)on the cumulative basis, for subsequent tax years.

(6) Paragraph (5) applies until the pension payer is directed otherwise by the Inland Revenue.

(7) If Parts 2 and 3 of Form P45 are given to the pension payer after the pension has started and after a code has been issued by the Inland Revenue, they must be destroyed.

Subsequent procedure on issue of UK resident pensioner’s codeU.K.

61.—(1) On making any relevant pension payment to a pensioner falling within regulation 58 after the Inland Revenue have issued a code to the pension payer for use in respect of the pensioner, the pension payer must deduct or repay tax by reference to that code.

(2) For the purposes of paragraph (1) and regulation 66 (deductions working sheets)—

(a)any total payments to date notified to the pension payer by the Inland Revenue are treated as if they represented relevant pension payments made by pension payer; and

(b)the total net tax deducted before the first payment made in accordance with this regulation is taken to be the sum of—

(i)the total net tax deducted, if any, notified to the pension payer by the Inland Revenue, and

(ii)any tax which the pension payer was liable to deduct from the pensioner’s relevant pension payments under regulation 58.

(3) For the purposes of—

(a)item 8 of Table 2 in regulation 36(4) (Form P45), and

(b)regulation 55(4)(f) [F92(P46(Pen))],

any total payments to date and total net tax deducted which are which are notified to the employer by the Inland Revenue must be treated as if they were relevant pension payments made to the pensioner by, and tax deducted by, the pension payer.

(4) If the pensioner’s previous code was used on the cumulative basis, any amount notified to the pension payer under paragraph (2)(b)(i) must be added to the previous total tax to date for the purposes of regulation 23(8) (meaning of previous total tax to date).

[F93CHAPTER 3AU.K.BENEFITS IN KIND

InterpretationU.K.

61A.  In this Chapter—

[F94“amount foregone” has the meaning given in section 69B of ITEPA;]

“authorised employer” has the meaning given by regulation 61C;

“main relevant payment” means the relevant payment normally made to the specified employee at regular intervals of a week or more;

“making good payment” means the payment referred to in regulation 61E(2) or 61G(2)(b);

[F95“optional remuneration arrangements” has the meaning given in section 69A of ITEPA;”

“relevant amount” means the amount calculated in accordance with section 87A, 94A, 120A, 154A or 203A of ITEPA, as the case may be;]

[F96“specified benefit” means any benefit treated as earnings under any of the following provisions of Part 3 of ITEPA (employment income: earnings and benefits etc. treated as earnings)—

“specified employee” means an employee to whom an authorised employer provides a specified benefit;

“Taxable Amount of the Benefit” has the meaning given in regulation 61D(1).

PAYE: benefits in kindU.K.

61B.—(1) This Chapter applies where during a tax year an authorised employer provides a specified benefit to a specified employee.

(2) Where this Chapter applies—

(a)the specified benefit is to be treated as a payment of PAYE income for the purposes of these Regulations; and

(b)any reference (howsoever expressed) in these Regulations to relevant payment includes an amount in respect of the provision of a specified benefit, such amount to be determined in accordance with regulations 61D, 61H, 61I, 61J, [F10461K, 61L and 61LA], as the case may be;

but this is subject to paragraph (3).

(3) An amount determined in accordance with regulation 61D, 61H, 61I, 61J, [F10561K, 61L or 61LA], as the case may be, is not to be included as a relevant payment for the purpose of calculating whether the deduction of tax would exceed the overriding limit.

Authorised employerU.K.

61C.—(1) An employer is an authorised employer in respect of a specified employee for a tax year for the purposes of this Chapter if—

(a)HMRC has authorised that employer to make—

(i)deductions of income tax in respect of the provision of a specified benefit from payments which that employer actually makes of, or on account of, PAYE income of that employee; or

(ii)repayments of such income tax; and

(b)such authorisation has not been withdrawn.

(2) An employer will be authorised by HMRC if the conditions set out in paragraph (3) are met.

(3) The conditions are that—

(a)before the start of the tax year the employer has made an application for authorisation in respect of one or more specified employees to HMRC; and

(b)such an application identifies the specified benefit or benefits that will be provided to the specified employees.

(4) But in cases falling within paragraph (5), an employer may make an application for authorisation in respect of one or more specified employees during a tax year.

(5) The cases are that—

(a)a specified benefit or benefits is to be provided to the specified employees referred to in the application for the first time during the tax year;

(b)a specified benefit or benefits is to be provided to an employee upon commencement of employment and the employer is already an authorised employer for the purposes of this Chapter; or

(c)the application made before the start of the tax year contained an error.

(6) If during the tax year an authorised employer notifies HMRC that the application for authorisation is withdrawn in respect of the specified employees identified in the notification, then the employer will cease to be an authorised employer in respect of those specified employees from the end of the tax year in which that notice is given.

(7) But in cases falling within paragraph (8), where an authorised employer notifies HMRC the application for authorisation is withdrawn in respect of the specified employees identified in the notification, then the employer will cease to be an authorised employer in respect of those employees from the date that the notification is received by HMRC.

(8) The cases are—

(a)the relevant payment actually made to the specified employee named in the withdrawal notification will be insufficient to enable the authorised employer to deduct the full amount of tax due in respect of the relevant payment;

(b)that during the tax year the authorised employer stops providing a specified benefit or benefits to the specified employees identified in the withdrawal notification and the Revised Taxable Amount of the Benefit provided is nil; or

(c)the application made before the start of the year contained an error.

(9) Any application or notice must be made to HMRC using an approved method of electronic communication unless the employer is one to whom regulation 67D applies.

(10) For the purposes of this regulation, “Revised Taxable Amount of the Benefit” means the result of the calculation at step 3 of regulation 61I(2), as applied by regulation 61J(2).

Deduction and repayments of tax: general ruleU.K.

61D.—(1) Where this Chapter applies an authorised employer must take the following steps—

Step 1

Before making the first main relevant payment to a specified employee in a tax year, the cash equivalent [F106, the relevant amount or amount foregone in respect] of the specified benefit or benefits to be provided in that tax year must be determined in accordance with regulation 61E, 61F or 61G (methods of calculating the cash equivalent [F107, the relevant amount or amount foregone in respect] of specified benefits), as the case may be.

Step 2

Determine the number of main relevant payments to be made to the specified employee in that tax year.

Step 3

Divide the amount obtained from step 1 by the number obtained from step 2.

The resulting amount is the Taxable Amount of the Benefit.

Step 4

Add the Taxable Amount of the Benefit to the first main relevant payment.

Step 5

Deduct or repay tax on the amount obtained at step 4 in accordance with these Regulations by reference to the employee’s code if the employer has one for the employee, even if the code is the subject of an objection or appeal.

(2) On making any subsequent main relevant payment in the tax year the authorised employer must add the Taxable Amount of the Benefit to that payment and apply step 5 of paragraph (1) to that amount.

(3) This regulation is subject to regulations 61H, 61I, 61J, [F10861K, 61L and 61LA](modifications to the general rule).

Method of calculating the cash equivalent [F109or relevant amount in respect] of the benefit of a car or vanU.K.

61E.—(1) Where the specified benefit is the provision of a car or a van the cash equivalent [F110or relevant amount is calculated in accordance with section 121, 121A, 154A or 155 of ITEPA], as the case may be.

(2) For the purposes of paragraph (1), the authorised employer may take into account payments that the specified employee is required to make in the tax year as a condition of the car or van being available for that employee’s private use.

Method of calculating the cash equivalent [F111or amount foregone in respect] of the benefit of fuelU.K.

61F.—(1) Where the specified benefit is the provisions of car fuel or van fuel the cash equivalent [F112or amount foregone in respect of that benefit is calculated in accordance with section 149A, 150, 160A or 161 of ITEPA], as the case may be.

(2) For the purposes of paragraph (1), the authorised employer may take into account payments that the specified employee is required to make during the tax year in connection with the provision of fuel for that employee’s private use.

Method of calculating the cash equivalent [F113or relevant amount] of [F114non-cash vouchers, credit-tokens and] employment-related benefitsU.K.

61G.—(1) Where the specified benefit is [F115a non-cash voucher, credit-token or] any employment-related benefit the [F116cash equivalent or relevant amount of the specified benefit is to be calculated in accordance with section 87, 87A, 94, 94A, 203 or 203A of ITEPA, as the case may be.]

(2) For the purposes of paragraph (1), the authorised employer may make reasonable assumptions about—

(a)the cost of a specified benefit to be incurred in a tax year where the cost is not known at the start of the tax year; and

(b)payments that a specified employee is expected to make in the tax year to make good any part of the cost incurred in providing the benefit to that employee.

Modification of the general rule: cessation of employment but continuing benefitU.K.

61H.—(1) This regulation applies instead of regulation 61D(2) if during a tax year the employment of a specified employee ceases but the authorised employer continues to provide the specified benefit to that employee.

(2) Before the employment ceases the authorised employer must take the following steps—

Step 1

Determine at that time the number of remaining main relevant payments to be made in the employment.

Step 2

If the cost to the authorised employer of the specified benefit has changed, redetermine the cash equivalent [F117, relevant amount or amount foregone] in accordance with regulations 61E, 61F or 61G, as the case may be, otherwise the cash equivalent [F118, relevant amount or amount foregone in respect] of the specified benefit is that previously determined for the tax year under step 1 of regulation 61D(1).

The result is the revised cash equivalent [F118, relevant amount or amount foregone in respect] of the specified benefit provided during the employment.

Step 3

Calculate the taxable amount of the benefit provided to date by—

(a)determining the number of main relevant payments that have been made to date, then

(b)multiplying that number by the Taxable Amount of the Benefit obtained under step 3 of regulation 61D(1).

Step 4

Subtract the taxable amount of the benefit provided to date (the amount obtained from step 3) from the revised cash equivalent [F118, relevant amount or amount foregone in respect] of the benefit provided during the employment (the amount obtained from step 2).

Step 5

Divide the amount obtained from step 4 by the number obtained at step 1.

The result is the Adjusted Taxable Amount of the Benefit.

Step 6

Add the Adjusted Taxable Amount of the Benefit to either—

(a)the next main relevant payment, where that is the only main relevant payment remaining in the employment; or

(b)each of the remaining main relevant payments, where the number of remaining main relevant payment determined under step 1 of paragraph (2) is more than one,

and apply step 5 of regulation 61D(1) to that amount or amounts, as the case may be.

Modification of the general rule: in-year adjustments: change to the benefit during the year with effect from the date of the changeU.K.

61I.—(1) This regulation applies instead of regulation 61D(2) if during a tax year there is a change to the specified benefit provided to a specified employee and, for the purposes of calculating the cash equivalent [F119, relevant amount or amount foregone in respect] of that benefit under ITEPA, that change has effect from the date the revised benefit is provided to the employee.

(2) Subject to paragraph (4), the authorised employer must take the following steps—

Step 1

Before making the next main relevant payment after the change to the specified benefit has taken effect, calculate the revised cash equivalent [F120, relevant amount or amount foregone in respect] of the specified benefit by—

(a)determining the [F121cash equivalent, relevant amount or amount foregone in respect of the specified benefit that has been provided in the tax year, in accordance with section 87, 87A, 94, 94A, 121, 121A, 149A, 150, 154A, 155, 160A, 161, 203 or 203A of ITEPA], as the case may be, then

(b)determining the cash equivalent [F122, relevant amount or amount foregone in respect] of the specified benefit, that will be provided for the remainder of the tax year, in accordance with regulation 61E, 61F or 61G, as the case may be, and

(c)adding these numbers together.

Step 2

Calculate the taxable amount of the benefit provided to date by—

(a)determining the number of main relevant payments that have been made to date, then

(b)multiplying that number by the Taxable Amount of the Benefit determined under step 3 of regulation 61D(1).

Step 3

Subtract the taxable amount of the benefit provided to date (the amount obtained from step 2) from the revised cash equivalent [F123, relevant amount or amount foregone in respect] of the specified benefit (the amount obtained from step 1).

Step 4

Determine the number of remaining main relevant payments to be made in the tax year.

Step 5

Divide the amount obtained from step 3 by the number obtained at step 4.

The result, where the amount is a positive value, is the Increased Taxable Amount of the Benefit.

The result, where the amount is a negative value, is the Reduced Taxable Amount of the Benefit.

Step 6

Add the Increased Taxable Amount of the Benefit to, or subtract the Reduced Taxable Amount of the Benefit from, the next main relevant payment and apply step 5 of regulation 61D(1) to that amount.

(3) On making any subsequent main relevant payment in that year, the employer must add the Increased Taxable Amount of the Benefit to, or subtract the Reduced Taxable Amount of the Benefit from, that payment and apply step 5 of regulation 61D(1) to that amount.

(4) Where the change to the specified benefit occurs in the final tax month of a tax year and the authorised employer is not able to take the steps set out in paragraph (2) before the final main relevant payment for that year is made that employer must—

(a)comply with steps 1 to 5 of paragraph (2) before the first main relevant payment of the next tax year (“tax year 2”) is made;

(b)add the Increased Taxable Amount of the Benefit to, or subtract the Reduced Taxable Amount of the Benefit from, the first main relevant payment to be made in tax year 2; and

(c)apply step 5 of regulation 61D(1) to that amount.

Modification of the general rule: in-year adjustments: change to the benefit during the year with effect from the start of tax year and other changesU.K.

61J.—(1) This regulation applies if during a tax year:

(a)there is a change to the specified benefit provided to a specified employee and, for the purposes of calculating the cash equivalent [F124, relevant amount or amount foregone in respect] of that benefit under ITEPA, that change has effect from the start of the tax year;

(b)the employer becomes aware that the cash equivalent [F124, relevant amount or amount foregone in respect] of the specified benefit determined at the start of the year in accordance with regulation 61E, 61F or 61G (method of calculating the cash equivalent) is no longer accurate;

(c)the employer will stop providing a specified benefit during the tax year; or

(d)there is a change to the number of main relevant payments used to determine the Taxable Amount of the Benefit where the specified employee is paid at irregular intervals.

(2) Where this regulation applies, regulation 61D(2) no longer applies and regulation 61I applies but with the modification in paragraph (3).

(3) For the purposes of calculating the revised cash equivalent [F125, relevant amount or amount foregone] of the specified benefit, step 1 of regulation 61I(2) is modified as follows—

Step 1

In cases where regulation 61J(1)(a), (b) or (c) applies, redetermine the cash equivalent [F125, relevant amount or amount foregone] of the specified benefit in accordance with regulations 61E, 61F or 61G, as the case may be. In cases where regulation 61J(1)(d) applies, use the cash equivalent [F125, relevant amount or amount foregone] of the benefit determined at the start of the year under step 1 of regulation 61D(1).

(4) Any references in regulation 61I(2) to the revised cash equivalent [F126, relevant amount or amount foregone in respect] of the benefit or to the amount obtained under step 1 of 61I(2) are to be read in accordance with paragraph (3).

Modification of the general rule: making goodU.K.

61K.—(1) This regulation applies instead of regulation 61D(2) where immediately before the authorised employer makes the final main relevant payment of the tax year the specified employee has not made any or all of the making good payment.

(2) The authorised employer must—

(a)ascertain the difference between:

(i)the amount of the making good payment that has been taken into account when determining the cash equivalent [F127, relevant amount or amount foregone in respect] of the specified benefit at the start of the tax year; and

(ii)the amount the specified employee has actually paid at that time;

(b)add the amount obtained under sub-paragraph (a) to the final main relevant payment, and

(c)apply step 5 of regulation 61D(1) to that amount.

(3) Where this regulation applies the authorised employer may not take into account making good payments for the purposes of calculating the cash equivalent [F128, relevant amount or amount foregone in respect] of the same specified benefit provided to the same specified employee in the following tax year.

Modification of the general rule: failure to make good fuel benefitU.K.

61L.—(1) This regulation applies if the specified employee has not made the payment referred to in regulation 61F(2) before 1st June following the end of the tax year (“tax year 1”) in which the specified benefit of car fuel or van fuel was provided.

(2) Before making the first main relevant payment after 1st June following the end of tax year 1 (“the first main relevant payment in tax year 2”) the authorised employer must take the following steps—

Step 1

Redetermine the cash equivalent of the specified benefit of car fuel or van fuel received in tax year 1 in accordance with section 150 or 161 of ITEPA on the basis that Condition A in section 151 or 162 of ITEPA (car fuel and van fuel: nil cash equivalent), as the case may be, has not been met.

The result is the Outstanding Taxable Amount of the Fuel Benefit for Tax Year 1.

Step 2

Add the Outstanding Taxable Amount of the Fuel Benefit for Tax Year 1 to the first main relevant payment in tax year 2 and apply step 5 of regulation 61D(1) to that amount.

(3) Where this regulation applies and the authorised employer is continuing to provide the specified benefit of car fuel or van fuel in tax year 2, the employer must make an in-year adjustment for that year, in accordance with regulation 61J(1)(b), and redetermine the cash equivalent of the specified benefit without taking into account payments the employee is required to make, in connection with the private use of fuel, as referred to in regulation 61F(2).

[F129Modification of the general rule: failure to make good benefit of credit-tokenU.K.

61LA.—(1) This regulation applies where the specified benefit is a credit-token and the specified employee has not made all of the making good payments referred to in regulation 61G(2)(b) before 1st June following the end of the tax year (“tax year 1”) in which the credit-token was used.

(2) Before making the first main relevant payment after 1st June in the following tax year (“the first main relevant payment in tax year 2”) the authorised employer must take the following steps—

Step 1

Calculate the outstanding taxable amount of the benefit of the credit-token used in tax year 1 by-

(a)determining the cash equivalent [F130or relevant amount] of the benefit of the credit-token used in that tax year in accordance with section 94 [F131or 94A] ITEPA;

(b)subtracting from that amount the cash equivalent [F130or relevant amount] of the benefit of the credit-token used as determined under step 1 of regulation 61I(2) as modified by regulation 61J(3) during that tax year.

Step 2

Add the amount obtained from step 1 to the first main relevant payment in tax year 2 and apply step 5 of regulation 61D(1) to that amount.

(3) Where this regulation applies regulation 61G(2)(b) does not apply in respect of credit-tokens used in tax year 2.]

Information to specified employeesU.K.

61M.—(1) Before 1st June following the end of the tax year in which the specified benefits have been provided, an authorised employer must provide a statement to every specified employee identifying—

(a)every specified benefit provided to that employee during that tax year; and

(b)the cash equivalent [F132, relevant amount or amount foregone in respect] of the specified benefit provided during that tax year treated as a payment of PAYE income under this Chapter.

(2) In this regulation—

(a)“authorised employer” includes an employer who ceased to be an authorised employer during or after the tax year; and

(b)“specified employee” includes an employee who was a specified employee for only part of the tax year.]

CHAPTER 4U.K.MISCELLANEOUS

Deductions in respect of notional paymentsU.K.

62.—(1) This regulation applies if an employer makes a relevant payment which is a notional payment [F133(including a notional payment arising by virtue of a retrospective tax provision)] to an employee.

(2) The employer must, so far as possible, deduct tax required to be deducted in respect of a notional payment in accordance with any of [F134the provisions listed in paragraph (3)] from any relevant payment or payments which the employer actually makes to the employee at the same time as the notional payment.

(3) [F135The provisions are—]

(4) If the employer cannot deduct the full amount of tax as required by paragraph (2) from another relevant payment made at the same time as the notional payment, the employer must, so far as possible, deduct the tax from any payment or payments which the employer makes later in the same tax period.

(5) If the relevant payments actually made are insufficient to enable the employer to deduct the full amount of tax due in respect of notional payments, the employer must account to the Board of Inland Revenue for any amount which the employer is unable to deduct.

(6) Regulations 23(5) and 28(5) (deductions on cumulative or non-cumulative basis not to exceed the overriding limit) do not apply to the extent that the tax to be deducted is in respect of a notional payment.

Repayment during unpaid leaveU.K.

63.—(1) This regulation applies if—

(a)an employee is not entitled to receive any relevant payments on a normal pay day because of absence from work,

(b)the cumulative basis would have been used in relation to a payment made on that day,

(c)the employee does not fall within regulation 64(1) (absence from work due to participation in trade dispute), and

(d)the employee, or the employee’s authorised representative, makes an application in person to the employer.

(2) The employer must—

(a)comply with regulation 23 (cumulative basis: deduction and repayment) and accordingly repay any tax due to the employee, and

(b)comply with regulation 66(4) to (6) (completion of deductions working sheet),

as if the pay day were one on which relevant payments of nil had been made.

Trade disputesU.K.

64.—(1) This regulation applies if an employee—

(a)is absent from work because of a trade dispute at the employee’s place of work, and

(b)is participating or directly interested in the trade dispute.

(2) The employer must—

(a)on making any relevant payment, calculate the amount of tax to be deducted or repaid, and

(b)comply with paragraphs (5) to (8).

(3) If no relevant payments are to be made on the normal pay day but the employee’s code would be used on the cumulative basis if a relevant payment were made on that day, the employer must—

(a)calculate, in accordance with regulation 23 (cumulative basis: deduction and repayment) whether any tax is due to be repaid on that day as if it were a day on which relevant payments of nil had been paid, and

(b)comply with paragraphs (5) to (8).

(4) Paragraphs (2) and (3) are subject to paragraphs (9) and (10).

(5) The employer—

(a)must not repay any tax due to be repaid until the end of the employee’s strike action, but

(b)must deduct any tax due to be deducted, less any repayment for the tax year which has not been made.

(6) The amount of any repayment—

(a)made at the end of the employee’s strike action under paragraph (5)(a), or

(b)set against tax due to be deducted under paragraph (5)(b),

must be reduced by any amount previously set off in accordance with paragraph (5)(b).

(7) If the absence of an employee extends beyond the end of the tax year, the employer must—

(a)before 1st June following the end of the tax year, give notice to the employee of the amount of any repayment of tax for the tax year in question calculated in accordance with paragraph (2) which has not been set off against any tax due to be deducted under paragraph (5)(b); and

(b)complete the certificate which must be given under regulation 67 (Form P60) and the return which must be sent under regulation 73 (Form P35 and P14) as if that tax had been repaid to the employee.

(8) If the employer has not made any repayment of tax withheld under paragraph (5) within 42 days after the end of the employee’s strike action, the employer must instead immediately pay the tax not repaid to the Inland Revenue, and regulation 69(2) (receipt where requested) applies to that payment.

(9) An employee from whom a repayment of tax has been withheld in accordance with paragraph (5) may request a benefit officer to certify that—

(a)section 14 of the Jobseekers Act 1995(1), or

(b)in Northern Ireland, article 16 of the Jobseekers (Northern Ireland) Order 1995(2),

(no allowance to those involved in trade dispute) does not disqualify the employee from receiving jobseeker’s allowance, whether or not the employee is in fact entitled to receive jobseeker’s allowance.

(10) If a benefit officer certifies in accordance with paragraph (9), the employer must make such repayment to the employee as may be due.

(11) In this regulation—

“benefit officer” means the appropriate officer—

“end of the employee’s strike action” means any of the following—

“jobseeker’s allowance” has the same meaning as in regulation 148;

“place of work” has the meaning given in section 14(4) of the Jobseekers Act 1995 or, in Northern Ireland, in article 16(4) of the Jobseekers (Northern Ireland) Order 1995.

Repayment if no longer employedU.K.

65.—(1) This regulation applies if, in a tax year, a person (“P”)—

(a)was employed,

(b)is no longer employed, and

(c)applies for a repayment of tax.

(2) P must give the Inland Revenue—

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)either certificate A or B, depending on P’s circumstances, and

(c)such evidence of P’s unemployment as the Inland Revenue may require.

(3) Certificate A is one which certifies that P is unemployed and, to the best of P’s knowledge and belief, P—

(a)will not be a claimant during the period starting with the date on which the application is made and ending at the end of the tax year, and

(b)will not be employed during that period.

(4) Certificate B is one which certifies that P is unemployed and is not a claimant when the application is made.

(5) On receiving P’s application, the Inland Revenue must make any repayment of tax which is appropriate, having regard to P’s employee’s code and the following information.

(6) If P gives certificate A the information is—

(a)the total payments to date and the corresponding total tax to date as at the week or month shown in Parts 2 and 3 of Form P45 (or, if lower, the total net tax deducted shown in it),

(b)any other relevant payments received by P in the tax year to date, and

(c)any other payments P will receive in the tax year.

(7) If P does not give certificate A the information is—

(a)the total payments to date and the corresponding total tax to date as at the week or month shown in Parts 2 and 3 of Form P45 (or, if lower, the total net tax deducted shown in it), and

(b)any other relevant payments received by P in the tax year to date.

(8) For the purposes of this regulation, “claimant” means a person who is—

(a)a claimant as defined by regulation 148 (jobseeker’s allowance), or

(b)a claimant in receipt of taxable benefit as defined by regulation 173 (incapacity benefit).

[F138Relief from income tax on PAYE income: information about deductible expensesU.K.

65A.—(1) This regulation applies if, in relation to a tax year—

(a)an employee is entitled to relief from income tax in consequence of deductions allowed under Chapter 2 [F139or Chapter 4] of Part 5 of ITEPA (deductions for employee’s expenses) (“the deductible expenses”),

(b)the total amount of the deductible expenses for that employee in respect of all employments in that tax year does not exceed £2,500, and

(c)the employee has not been given a notice under section 8 of TMA (personal return) or delivered a purported return within section 12D of TMA (returns made otherwise than pursuant to a notice) for the tax year to which the deductible expenses relate.

(2) For the purposes of paragraph (1)(c), a notice under section 8 of TMA is treated as not having been given to an employee if that notice has been withdrawn in accordance with section 8B of that Act (withdrawal by HMRC of notice under section 8 or 8A).

(3) Without prejudice to section 711 of ITEPA (right to make a return), the employee may notify HMRC of the deductible expenses by providing specified information relating to those expenses to HMRC in accordance with this regulation.

[F140(4) For the purposes of this regulation, the specified information means—

(a)the tax year in relation to which the employee is entitled to relief from income tax as described in paragraph (1)(a) in respect of the deductible expenses notified;

(b)in relation to that employee—

(i)the employee’s full name,

(ii)the employee’s date of birth,

(iii)the employee’s address (including postcode), and

(iv)the employee’s national insurance number (if any);

(c)in relation to each of the deductible expenses notified—

(i)the amount of the deductible expense,

(ii)a description of the deductible expense,

(iii)the employer’s PAYE reference of the relevant employer, and

(iv)in the case of a deductible expense allowed under Chapter 4 of Part 5 of ITEPA, a description of the industry or business sector of the relevant employer.

(4A) The relevant employer in relation to a deductible expense is the person to whom paragraph (4B) applies.

(4B) This paragraph applies to a person if—

(a)the person is the employee’s employer in relation to an employment, and

(b)the deductible expense in question is allowed from the employee’s taxable earnings from that employment.]

(5) The specified information must be provided in the form and manner given in a direction made by the Commissioners for Her Majesty’s Revenue and Customs for this purpose.

(6) A direction made under paragraph (5) may also—

(a)authorise, or specify a requirement for, the delivery of information by an approved method of electronic communication, and

(b)where such a requirement is specified, specify the persons required to deliver information to HMRC by the approved method of electronic communication.

(7) The specified information cannot be provided more than 4 years after the end of the tax year to which the information relates.]

Deductions working sheetsU.K.

66.—(1) Paragraph (2) applies if a code has been issued to an employer in respect of an employee.

(2) The employer must, on making a relevant payment to the employee, prepare a deductions working sheet (unless the employer has already done so).

(3) The employer must record in the deductions working sheet—

(a)the employee’s name,

(b)the employee’s national insurance number, if known,

(c)the employee’s code, and

(d)the tax year to which the deductions working sheet relates.

(4) The employer must record in the deductions working sheet in respect of every relevant payment which the employer makes to the employee—

(a)the date of the payment,

(b)the amount of the payment, and

(c)the amount of tax, if any, deducted or repaid on making the payment, or to be deducted or accounted for under regulation 62(4) or (5) (notional payments).

[F141(4A) For the purposes of paragraphs (4)(a) and (6)(a), (b), (c), and (e)(i), a relevant payment—

(a)which comprises an amount of retrospective employment income, and

(b)which was actually paid during a tax year which is not closed,

shall be treated, for the purpose of computing the amount of tax to be deducted, as paid at the earlier of the relevant time and the end of the last tax period in which the former employee was employed .]

(5) If the employee’s code is used on the cumulative basis, the employer must, in respect of every relevant payment which the employer makes to the employee, either—

(a)record the following information in the deductions working sheet, or

(b)keep such records as enable its production.

(6) The information is—

(a)the total payments to date in relation to the date of payment,

(b)the total free pay to date or, as the case may be, the total additional pay to date, in relation to that date,

(c)the total taxable payments to date in relation to that date,

(d)the corresponding total tax to date,

[F142(e)the tax due to be deducted at that date (subject to the overriding limit),

(ea)the overriding limit, if any, in relation to the payment,

(eb)the amount of any tax not deducted at that date because of the overriding limit, and]

(f)any amount of tax which is not to be repaid because of regulation 64 (trade disputes).

(7) If the employee’s code is not used on the cumulative basis, the employer must, in respect of every relevant payment which the employer makes to the employee, either—

(a)record the following information in the deductions working sheet, or

(b)keep such records as enable its production.

(8) The information is—

(a)the free pay, or, as the case may be, the additional pay for the employee’s code,

(b)the taxable payments, and

(c)... the tax due to be deducted and the overriding limit.

[F143(9) Nothing in this regulation applies to a closed tax year (see regulation 66A).]

[F144Deduction working sheets: retrospective employment income in closed tax yearU.K.

66A.—(1) Paragraph (2) applies if—

(a)a code has been issued to an employer in respect of an employee for a tax year which has subsequently become a closed tax year (“the relevant tax year”); and

(b)after the end of that tax year a payment made during it to that employee becomes a qualifying payment.

(2) The employer must at the relevant time —

(a)in a case where there was a deductions working sheet for the employee for the relevant tax year, revise it to reflect the effect of the retrospective tax provision on the total PAYE income including the retrospective employment income for that year; and

(b)in a case where there was no deductions working sheet for the employee for the relevant year, produce one showing that effect on that income for that year.

(3) In a case falling within paragraph (2)(b) the employer must record in the deductions working sheet—

(a)the employee’s name,

(b)the employee’s national insurance number, if known,

(c)the employee’s final code for the relevant tax year, and

(d)details of the relevant tax year.

(4) The employer must record in the deductions working sheet in respect of every qualifying payment—

(a)the date on which the payment is made,

(b)the amount of the payment, and

(c)the amount of tax, if any, to be deducted or accounted for under regulation 62(4) or (5) (notional payments).

(5) Despite paragraph (4)(a), in completing the deductions working sheet, the amount of any retrospective employment income shall be treated, for the purpose of computing the amount of tax to be deducted, as if it were paid in the final tax period, in which the employee was employed, in the relevant tax year.]

Information to employees about payments and tax deducted (Form P60)U.K.

67.—(1) Before 1st June following the end of the tax year, an employer must give a certificate (Form P60) to every employee—

(a)who was in the employer’s employment on the last day of the tax year, and

(b)from whose relevant payments the employer was required to deduct tax at any time during that tax year.

(2) The certificate must show—

(a)the tax year to which it relates,

(b)the employer’s PAYE reference,

(c)the employee’s name,

(d)the employee’s national insurance number, if known,

(e)any number used by the employer to identify the employee,

(f)the total amount of the relevant payments made by the employer to the employee during the tax year in respect of the employment in question,

(g)the total net tax deducted in relation to those payments, subject to regulation 64(7)(b) (trade disputes),

(h)the employee’s code,

(i)the employer’s name, and

(j)the employer’s address.

(3) In the case of an employee taken into employment after the beginning of the tax year, the certificate must also show—

(a)any amounts required by regulation 43(9), 52(11), 53(3) or 61(3) to be treated as relevant payments made by the employer to the employee during the tax year,

(b)any amounts treated as tax deducted by the employer at the end of the tax year by any of those regulations,

(c)the sum of the figures given under sub-paragraph (a) of this paragraph and paragraph (2)(f),

(d)the sum of the figures given under sub-paragraph (b) of this paragraph and paragraph (2)(g).

[F145Revised information to employees about payments and tax deducted (Form P 60)U.K.

67A.—(1) This regulation applies where—

(a)an enactment containing a retrospective tax provision applicable to a closed tax year is passed; and

(b)in consequence of the passing of that enactment an employee’s employment income in that closed tax year is increased.

(2) Before 1^st January next following the passing of the enactment—

(a)if the employer has previously given the employee a certificate (Form P60), the employer must give the employee a revised certificate (Form P60); and

(b)if the employer has not previously given the employee such a certificate, the employer must give the employee a copy of the revised form P14 completed in accordance with regulation 73A (amended return of relevant payments (Forms P14 and P35(RL)) .

(3) Paragraphs (2) and (3) of regulation 67 apply, in a case falling within paragraph (2)(a), for the purposes of this regulation as they apply for the purposes of that regulation, save that—

(a)sub-paragraph (f) of paragraph (2) shall have effect as if for “the total amount” there were substituted “the revised total amount”; and

(b)sub-paragraph (g) of that paragraph shall have effect as if for “total net tax” there were substituted “the revised total amount of net tax”;

with references to revised amounts being construed as references to the amounts of relevant payments and net tax deducted computed after the application of the retrospective tax provision.

(4) Where a revised certificate is given under this regulation—

(a)the employer must endorse it to show that it supersedes an earlier certificate; and

(b)the employee must not use the certificate which it supersedes.]