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Procedure.Tax
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D4: PAYE
Obligation to generate and use reference number for relevant payments
"(1) A Real Time Information employer who makes a relevant payment using an approved method of electronic communications which falls to be included in a return under regulation 67B must—
(a) generate a reference under paragraph (3) and include it in that return,
(b) notify the service provider that the payment is a relevant payment, and
(c) generate a sub-reference under paragraph (3) in respect of the relevant payment and notify the service provider of that sub-reference.
(2) A service provider who receives a notification under paragraph (1)(b) must notify HMRC of the information it holds that is required for generating a reference under paragraph (3) in relation to the relevant payment.
(3) A reference and sub-reference under this paragraph is to be generated using the method specified by the Commissioners for Her Majesty's Revenue and Customs in a direction.
(4) In paragraphs (1) and (2), “service provider” means the provider of the approved method of electronic communications using which the payment is made.
(5) For the purposes of paragraphs (1) and (4), an “approved method of electronic communications” is any method of electronic communications which has been approved for the purposes of regulation 199 (large employers required to make specified payments electronically).
(6) A direction under paragraph (3) may also—
(a) specify circumstances in which paragraphs (1) and (2) are not to apply, and
(b) specify the form and manner of the notifications required by paragraphs (1)(b) and (c) and (2)." (SI 2003/2682, r.67CA)
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Employer's obligation to pay
"(1) For each tax period, a Real Time Information employer must pay to, or may recover from, HMRC the amount arrived at under the formula in paragraph (4).
(2) If the amount arrived at under the formula in paragraph (4) is a positive amount, the employer must pay the excess to HMRC.
(3) If the amount arrived at under the formula in paragraph (4) is a negative amount, the employer may recover that amount either—
(a) by deducting it from the amount which the employer is liable to pay under paragraph (2) for a later period in the tax year, or
(b) from the Commissioners for Her Majesty's Revenue and Customs.
[...]
(7) This regulation is subject to regulations 67H (payments to and recoveries from HMRC for each tax period by Real Time Information employers: returns under regulation 67E(6)), 71 (modification of regulations 67G and 68 in case of trade dispute) and 75B (certificates under regulation 75A: excess payments)." (SI 2003/2682, r.67G)
Return containing correction
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"(3A) Where a return for a tax period contains a correction under regulation 67E(5) (returns under regulations 67B and 67D: amendments)) and paragraph (3) of this regulation applies, the negative amount is treated as having been paid to HMRC—
(a) 17 days after the end of the tax period in respect of which that return is delivered, where payment is made using an approved method of electronic communications, or
(b) 14 days after the end of the tax period in respect of which that return is delivered, in any other case." (SI 2003/2682, r.67G)
Formula
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"(4) The formula in this paragraph is A–B, where—
A is the sum total of the relevant amounts for each of the employer's employees, and
B is amount A for the previous tax period in the tax year, if any." (SI 2003/2682, r.67G)
Relevant amount
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"(5) For the purposes of paragraph (4), a “relevant amount” is the amount shown under paragraph 17 of Schedule A1 (real time returns) for an employee in the most recent return made in the tax year by the employer under regulation 67B (real time returns of information about relevant payments) or 67D (exceptions to regulation 67B) which contains information about that employee.
(5A) If the employer makes a return under regulation 67EA(3) (failure to make a return under regulation 67B or 67D) a “relevant amount” for the purposes of paragraph (4) is the amount shown under paragraph 17 of Schedule A1 (real time returns) for an employee in that return for the tax year to which that return relates." (SI 2003/2682, r.67G)
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Most recent return
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"(6) In paragraph (5) “the most recent return” means the return which, as at the end of the tax period, contains the most up to date information under paragraph 17 of Schedule A1 about the employee." (SI 2003/2682, r.67G)
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Payment of amounts shown in supplemental return to correct inaccuracy
"(1) This regulation applies if, during any tax period, an employer makes a return under regulation 67E(6) (returns under regulations 67B and 67D: amendments) other than by virtue of regulation 67E(4).
(2) If the return shows—
(a) an adjustment under regulation 67E(7)(a)(iii) or (iiib), or
(b) an adjustment to the amount originally given under paragraph 17 of Schedule A1,
and the value of the adjustment is a positive amount, that amount is an amount due to be paid to HMRC for the final tax period of the tax year the return relates to.
(3) [If the return shows such an adjustment and the value of the adjustment is a negative amount, that amount is an amount due to be repaid to the employer for the final tax period of the tax year the return relates to and]2 the employer may recover that amount—
(a) by setting it off against the amount the employer is liable to pay under regulation 67G for the tax period the return was made in, or
(b) from the Commissioners for Her Majesty's Revenue and Customs.
(4) Where the value of the adjustment is a negative amount, that amount is treated as having been paid to HMRC—
(a) 17 days after the end of the final tax period of the tax year the return relates to, if payment is made using an approved method of electronic communications, or
(b) 14 days after the end of the final tax period of the tax year the return relates to, in any other case." (SI 2003/2682, r.67H)
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Due date (17 days if electronic, otherwise 14 days)
"(1) An employer must pay amounts due under regulation 67G(2), as adjusted by regulation 67H(2) where appropriate, or 68(2)—
(a) within 17 days after the end of the tax period, where payment is made by an approved method of electronic communications, or
(b) within 14 days after the end of the tax period, in any other case.
(1A) In paragraph (1), the reference to amounts due under regulation 67G(2) includes any amount the employer was liable to deduct from employees during the tax period whether or not that amount was included in any return under regulation 67B (real time returns of information about relevant payments) or 67D (exceptions to regulation 67B)." (SI 2003/2682, r.69)
HMRC to give receipt
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"(2) The Inland Revenue must give a receipt to the employer for the total amount paid under regulation 67G(2), as adjusted by regulation 67H(2) where appropriate, or 68(2) if asked.
(3) But no separate receipt for tax only need be given if a receipt is given for the total amount of tax and any earnings-related contributions (as defined by regulation 1(2) of the SSC Regulations) paid at the same time." (SI 2003/2682, r.69)
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Retrospective employment income
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"(4) In paragraph (1) “the tax period”, in relation to an amount of retrospective employment income, means the tax period immediately following the relevant time." (SI 2003/2682, r.69)
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- Tax period is usually one month
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"“tax period” means—
(a) tax quarter, if …8 regulation 70 (quarterly tax periods) applies, or
(b) tax month, in every other case;" (SI 2003/2682, r.2)
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“tax month” means the period beginning on the 6th day of a calendar month and ending on the 5th day of the following calendar month;" (SI 2003/2682, r.2)
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- Quarterly tax periods for small employer
"(1) This regulation applies, so that the tax period is a tax quarter, if an employer—
(a) has reasonable grounds for believing that the average monthly amount will be less than £1,500, and
(b) chooses to pay tax quarterly.
(1A) But this regulation does not apply, so that the tax period remains a month, in respect of amounts of retrospective employment income." (SI 2003/2682, r.70)
Average monthly amount
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(2) “The average monthly amount” is the average, for tax months falling within the current tax year, of the amounts found by the formula—
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(P + N + L + S) - (SP + CD)
(3) In paragraph (2)—
P is the amount which would be payable to the Inland Revenue under regulation 67G, as adjusted by regulation 67H(2) where appropriate, or 68 but disregarding any amount payable in respect of retrospective employment income;
N is the amount which would be payable to the Inland Revenue under the SSCBA and the SSC Regulations disregarding—
(a) any amount of secondary Class 1 contributions in respect of which liability has been transferred to the employed earner by an election made jointly by the employed earner and the secondary contributor for the purposes of paragraph 3B(1) of Schedule 1 to the SSCBA (transfer of liability to be borne by earner);
(aa) any amount payable under retrospective contributions regulations (see paragraph 1(2) of Schedule 4 to the SSC Regulations) in respect of retrospective earnings (within the meaning of those Regulations);
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L is the amount which would be payable to the Inland Revenue under regulation [54(1) or, in Northern Ireland, 49(1)]6 of the Student Loans Regulations (payment of repayments deducted to the Inland Revenue) disregarding—
(a) the reduction referred to in paragraph (3) of those regulations,
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S is the amount which would be payable by the employer to the Inland Revenue under sections 559 and 559A of ICTA (deduction on account of tax etc from payments to certain sub-contractors) and regulation 8 of the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993 …1;
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SP is the amount which would be payable by the employer to employees by way of statutory sick pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory adoption pay and statutory parental bereavement pay under the SSCBA; and
CD is—
(a) if the employer is a company, the amount which others would deduct from payments to it, in its position as a sub-contractor, under section 559 of ICTA (deduction on account of tax etc from payments to certain sub-contractors);
(b) in any other case, nil." (SI 2003/2682, r.70)
Employed earner
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"(4) In this regulation—
“employed earner” has the same meaning as in the SSCBA;
“SSCBA” means the Social Security Contributions and Benefits Act 1992 or, in Northern Ireland, the Social Security Contribution and Benefits (Northern Ireland) Act 1992;" (SI 2003/2682, r.70)
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