The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2017

• Citation: S.I. 2017/1263
• Sections: 17

Section 1 Citation and commencement

These Regulations may be cited as the Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2017 and come into force on 6th April 2018.

Section 2 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

The Income Tax (Pay As You Earn) Regulations 2003 are amended as follows.

Section 3 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61A (interpretation)—

(a) before the definition of “authorised employer” insert—

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

(b) after the definition of “making good payment” insert—

“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;

(c) in the definition of “specified benefit” —

(i) after paragraph (a) insert—

(aa) section 87A (benefit of non-cash voucher treated as earnings: optional remuneration arrangements),

(ii) after paragraph (b) insert—

(ba) section 94A (benefit of credit-token treated as earnings: optional remuneration arrangements),

(iii) after paragraph (c) insert—

(ca) section 120A (benefit of car treated as earnings: optional remuneration arrangements),

(iv) after paragraph (d) insert—

(da) section 149A (benefit of car fuel treated as earnings: optional remuneration arrangements),

(v) after paragraph (e) insert—

(ea) section 154A (benefit of a van treated as earnings: optional remuneration arrangements),

(vi) after paragraph (f) insert—

(fa) section 160A (benefit of van fuel treated as earnings: optional remuneration arrangements),

(vii) after paragraph (g) insert—

(ga) section 203A (employment-related benefit provided under optional remuneration arrangements);

Section 4 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61D (deduction and repayments of tax: general rule) in paragraph (1) Step 1—

(a) after the first occurrence of “cash equivalent” insert “, the relevant amount or amount foregone in respect”, and

(b) after the second occurrence of “cash equivalent” insert “, the relevant amount or amount foregone in respect”.

Section 5 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61E (method of calculating the cash equivalent of the benefit of a car or van)—

(a) in the heading, after “cash equivalent” insert “or relevant amount in respect”, and

(b) in paragraph (1) for the words “of that benefit” to “(cash equivalent of the benefit)” substitute “or relevant amount is calculated in accordance with section 121, 121A, 154A or 155 of ITEPA”.

Section 6 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61F (method of calculating the cash equivalent of the benefit of fuel)—

(a) in the heading after “cash equivalent” insert “or amount foregone in respect”, and

(b) in paragraph (1) for the words “of that benefit” to “cash equivalent)” substitute “or amount foregone in respect of that benefit is calculated in accordance with section 149A, 150, 160A or 161 of ITEPA”.

Section 7 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61G (method of calculating the cash equivalent of non-cash vouchers, credit-tokens and employment-related benefits)—

(a) in the heading after “cash equivalent” insert “or relevant amount”, and

(b) in paragraph (1) for the words “cash equivalent” to “as earnings).” substitute “cash 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.”.

Section 8 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In paragraph (2) of regulation 61H (modification of the general rule: cessation of employment but continuing benefit)—

(a) after the first occurrence of “cash equivalent” in Step 2 insert “, relevant amount or amount foregone”, and

(b) after each subsequent occurrence of “cash equivalent” in Steps 2 and 4 insert “, relevant amount or amount foregone in respect”.

Section 9 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61I (modification of the general rule: in-year adjustments: change to the benefit during the year with effect from the date of the change)—

(a) in paragraph (1) after “cash equivalent” insert “, relevant amount or amount foregone in respect”, and

(b) in paragraph (2) Step 1—

(i) after the first occurrence of “cash equivalent” insert “, relevant amount or amount foregone in respect”,

(ii) in Step 1(a) for the words “cash equivalent” to “of ITEPA” substitute “cash 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”,

(iii) in Step 1(b) after “cash equivalent” insert “, relevant amount or amount foregone in respect”, and

(iv) in Step 3 after “cash equivalent” insert “, relevant amount or amount foregone in respect”.

Section 10 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61J (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 changes)—

(a) in paragraph (1) after each occurrence of “cash equivalent” insert “, relevant amount or amount foregone in respect”,

(b) in paragraph (3) after each occurrence of “cash equivalent” insert “, relevant amount or amount foregone”, and

(c) in paragraph (4) after “cash equivalent” insert “, relevant amount or amount foregone in respect”.

Section 11 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61K (modification of the general rule: making good)—

(a) in paragraph (2) after “cash equivalent” insert “, relevant amount or amount foregone in respect”, and

(b) in paragraph (3) after “cash equivalent” insert “, relevant amount or amount foregone in respect”.

Section 12 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61LA (modification of the general rule: failure to make good benefit of credit-token) in paragraph (2)—

(a) after each occurrence of “cash equivalent” in Step 1 insert “or relevant amount”, and

(b) after “section 94” insert “or 94A”.

Section 13 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 61M (information to specified employees) in paragraph (1)(b) after “cash equivalent” insert “, relevant amount or amount foregone in respect”.

Section 14 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 86 (information employer must provide for each employee)—

(a) in paragraph (1)—

(i) in sub-paragraph (c) for the words “section” to “as earnings)” substitute “section 87(1) (benefit of non-cash voucher treated as earnings) or 87A(1) (benefit of non-cash voucher treated as earnings: optional remuneration arrangements) of ITEPA”,

(ii) in sub-paragraph (d) for the words “section” to “as earnings)” substitute “section 94(1) (benefit of credit-token treated as earnings) or 94A(1) (benefit of credit-token treated as earnings: optional remuneration arrangements) of ITEPA”, and

(iii) in sub-paragraph (f) for the words “section” to “as earnings)” substitute “section 102 (benefit of living accommodation treated as earnings) or 103A (accommodation provided pursuant to optional remuneration arrangements: relevant amount) of ITEPA;”,

(b) in paragraph (3)—

(i) substitute the words “577(1) of ICTA ” with “356(1) of ITEPA”, and

(ii) after “inclusion” omit the words “as mentioned in section 577(1)(a) of that Act”.

Section 15 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 89 (annual return of other earnings: exclusion for notional payments) for the words “required under regulation 73” substitute “required under regulation 67B (real time returns of information about relevant payments)”.

Section 16 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

In regulation 90 (quarterly return if a car becomes available or unavailable (form P46 (Car))—

(a) in paragraph (1) for the words “section” to “treats” substitute “section 120 (benefit of car treated as earnings) or 120A (benefit of a car treated as earnings: optional remuneration arrangements) of ITEPA treat”, and

(b) for the words in paragraph (3)(d) substitute “any provisional sum as calculated pursuant to section 121A(1) of ITEPA,”.

Section 17 Amendment of the Income Tax (Pay As You Earn) Regulations 2003

For paragraph 22B of Schedule A1 (real time returns) substitute—

(22B)

(1) If applicable, an indication that comprised within the payment is an amount treated as a payment of PAYE income under regulation 61B (PAYE: benefits in kind) and, if so, the amount of the specified benefit in respect of which tax has been deducted.

(2) If the benefit is a car—

(a) in the first return in which the benefit of the car is included as a relevant payment, the following information in relation to that car—

(i) the make and model of the car,

(ii) if the car is a car with a CO2 emission figure within section 134(1) of ITEPA, the car’s CO2 emission figure determined by section 135, 136, 137 or 138 of ITEPA, as the case may be,

(iii) the type of fuel or power the car uses,

(iv) the calculated price of the car,

(v) the cash equivalent of the car or amount foregone in respect of the car, determined under regulation 61E and either section 121 or 121A of ITEPA, as the case may be,

(vi) the date on which the car was first made available,

(vii) the cash equivalent or the amount foregone in respect of any fuel provided for the car, determined under regulation 61F and either section 149A or 150 of ITEPA as the case may be, and

(viii) the date on which fuel has been provided for the car,

(b) if the car ceases to be available, in the next return following the cessation, the date the car became unavailable,

(c) if fuel has been provided for the car and ceases to be provided, in the next return following the cessation, the date the fuel ceased to be provided, and

(d) where an employer becomes aware of an inaccuracy in a return submitted under sub-paragraphs (a) to (c) above, the employer must provide the correct information in the next return for that tax year.

(3) In this paragraph—

“amount foregone” has the meaning given in section 69B of ITEPA,

“available” is to be read in accordance with section 116(1) of ITEPA (meaning of when a car or van is available to an employee),

“calculated price of the car” and “cash equivalent” are to be read in accordance with section 121 of ITEPA (method of calculating the cash equivalent of the benefit of a car)”, and

“unavailable” is to be read in accordance with section 143(2) of ITEPA (deduction for periods when car unavailable).