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Statutory Instrument 2004 No. 770The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004(The document as of February, 2008) STATUTORY INSTRUMENTS2004 No. 770SOCIAL SECURITYThe Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004
The Treasury, in exercise of the powers conferred upon them by sections 2(2) and (2A), 3(2), (2A) and (3), 4(6) and (7), 4A, 10(8) and (9), 10A(7), 19(1), (2)(b) and (5A), 122(1) and 175(3) and (4) of, and paragraphs 7B and 8(1)(ia) and (1A) of Schedule 1 to the Social Security Contributions and Benefits Act 1992[1] ("the 1992 Act") with the concurrence of the Secretary of State insofar as required and sections 2(2) and (2A), 3(2), (2A) and (3), 4(6) and (7), 4A, 10(8) and (9), 10A(7), 18(1), 19(1), (2)(b) and (5A),121(1) and 171(3), (4) and (10) of, and paragraphs 7B and 8(1)(ia) and (1A) of Schedule 1 to, the Social Security Contributions and Benefits (Northern Ireland) Act 1992[2] ("the 1992 Northern Ireland Act"), with the concurrence of the Department for Social Development insofar as required [3], and the Commissioners of Inland Revenue in exercise of the powers conferred upon them by sections 18(1), 175(3) and (4) of, and paragraphs 3(1), (3) and (6) and 6(1) of Schedule 1 to the 1992 Act [4] and sections 18(1), 171(3) and (4) of, and paragraphs 3(1), (3) and (6) and 6(1) of Schedule 1 to the 1992 Northern Ireland Act[5] hereby make the following Regulations: Citation, commencement, effect and interpretation 1. - (1) These Regulations may be cited as the Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 and shall come into force on 6th April 2004. (2) The substitution by regulation 12 of regulations 52 and 52A of the Contributions Regulations for the former regulation 52, and the consequential amendments made to those Regulations by regulations 11, 14, 26 and 32(11) of these Regulations have effect only in respect of contributions payable in respect of the year 2003-04 and subsequent years. (3) In these Regulations -
Amendment of the Contributions Regulations
(e) omit the definitions of "income tax month" and "month"; (f) for the definition of "non-cash voucher" substitute -
(i) after the definition of "the Taxes Act" insert -
4.In regulation 22A (amounts to be treated as earnings in connection with the use of qualifying vehicles other than cycles) [15] -
(ii) for the words from "Here "qualifying vehicle"" to "the Taxes Act," substitute -
and 5.In regulation 27(5)(a) (payments to directors which are to be disregarded) -
(b) at the end add "and Part 2 of Schedule 1 to ITEPA 2003". 6.Omit regulations 32 to 35.
(b) in paragraph (2) omit "(or, where regulation 35 applies, shall be further reduced)". 8.Omit regulation 37.
(b) in paragraph (6)(c)[17] after "(superannuation funds approved before 6th April 1980)" insert "or sections 590 (annuities) and 591 (taxable pension income)"; (c) in paragraph (8)(a) for "Part X" substitute "Part 10[18] or 10A[19]". 10.In regulation 42(1) (exception from liability to pay Class 1B contributions) -
(b) in sub-paragraph (b) for "emoluments" substitute "general earnings". 11.In regulation 51(2) (disposal of contributions not properly paid) for "regulation 52(1)" substitute "regulation 52 or 52A".
52. - (1) This regulation applies if a contribution other than a Class 4 contribution has been paid in error. This regulation is subject to regulations 51 and 57. (2) If this regulation applies, an application may be made to the Board for the return of the contribution paid in error. (3) An application under paragraph (2) shall be made to the Board -
(b) within the time permitted by paragraph (8). (4) On the making of an application under paragraph (2) the Board shall return the contribution paid in error.
(b) in the case of a Class 1A or Class 1B contribution, 50 pence. (6) Paragraph (4) does not require the return of a primary Class 1 contribution which is treated as properly paid by regulation 3 of the Social Security (Additional Pension) (Contributions Paid in Error) Regulations 1996[21].
(b) if they are recovered by the secondary contributor from that person may be returned -
(ii) with that person's consent given in writing or in such form and by such means of electronic communications as may be approved, to the secondary contributor. (8) An application for the return of any contribution paid in error shall be made within the period of six years from the end of the year in which the contribution was due to be paid.
(b) the application was made without unreasonable delay after the excuse had ceased. (9) In this regulation "error" means, and means only, an error which -
(b) relates to some past or present matter. Return of contributions paid in excess of maxima prescribed in regulation 21
(b) a primary Class 1 contribution to which regulation 3 of the Social Security (Additional Pension) (Contributions Paid in Error) Regulations 1996 (purposes for which primary Class 1 contributions paid in error are to be treated as properly paid) applies. (5) Contributions to which this regulation applies shall be returned in the following order -
(b) Class 2 contributions; (c) primary Class 1 contributions at the main primary percentage; (d) any amount of primary Class 1 contributions reduced in accordance with section 41(1) and (1A) of the Pensions Act[22] in respect of COSRS employment; (e) any amount of primary Class 1 contributions reduced in accordance with section 42A(1) and (2) of the Pensions Act[23] in respect of COMPS employment. (6) The amount to be refunded is determined in accordance with the following Rules.
Rule 1 applies where none of the employments is contracted-out.
In any other case to which this Rule applies take the following Steps: the amount to be returned is the excess of the contributions actually paid by the earner over the amount found by Step 5 in the following sequence. Step 1 Determine the amount of earnings between PT and UEL in respect of contracted-out employments held in the year. Step 2 Multiply the amount found by Step 1 by 9.4%. Step 3 Subtract the amount found by Step 1 from that found by the formula -
Step 4 Multiply the result produced by Step 3 by 11%. Step 5 Add together the results of Steps 2 and 4. Rule 3 If the amount of contributions paid in respect of APP employments exceeds the amount produced by the formula below, the amount to be refunded is the excess. The formula is -
Step 1 Determine the amount of earnings between PT and UEL in respect of APP employments held in the year. Step 2 Multiply the amount found by Step 1 by 11%. Step 3 Subtract the amount found by Step 1 from that found by the formula -
Step 4 Multiply the result produced by Step 3 by 9.4%. Step 5 Add together the results of Steps 2 and 4. (7) From the amount otherwise falling to be returned under Rule 2 or Rule 3 in paragraph (6) there shall be deducted so much of any payment of contributions as is attributable to the application of Steps Five and Seven in regulation 21(2). (8) If -
(b) the Board have been given notice under section 44(1) of the Pensions Act and have not rejected it, the contributions shall be returned in the order specified in paragraph (5) save that the contributions specified in sub-paragraph (c) shall be returned after those in sub-paragraphs (d) and (e).
(b) if they are recovered by the secondary contributor from that person may be returned -
(ii) with that person's consent given in writing or in such form and by such means of electronic communications as may be approved, to the secondary contributor.". 13.In regulation 55(2)(b) (repayment of Class 1A contributions) [25] for "emolument" substitute "general earnings".
(b) in sub-paragraph (b) for "regulation 52(6)" substitute "regulation 52(8)". 15.In regulation 67 (collection and recovery of earnings-related contributions and Class 1B contributions) -
16.In regulation 71(1) (due date for payment of a Class 1A contribution) after "19th July" insert "or, where payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, not later than 22nd July".
(b) in paragraph (2) -
(ii) after "14 days" insert "or, where payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, 17 days"; (c) in paragraph (4) -
(iii) in the definition of "relevant final tax month" (as amended by head (ii) of this sub-paragraph) -
(bb) omit the words from "and for these purposes" to the end of the definition. 18.In regulation 73 (Class 1A contribution due on cessation of business) -
(b) in paragraph (2) -
(ii) for "income tax month", in each place where it occurs, substitute "tax month"; and (c) in paragraph (4) -
(iii) in the definition of "relevant final tax month" (as amended by head (ii) of this sub-paragraph) -
(bb) omit the words from "and for these purposes" to the end of the definition. 19.In regulation 76(5) (interest on an overdue Class 1A contribution) after "19th July" insert "or where payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, the 22nd July".
(b) for paragraph (1A) substitute -
(b) arranging for the information which it would contain to be delivered to an official computer system by an approved method of electronic communications."; and (c) omit paragraphs (1B) to (1F). 21.Omit regulation 80A[27].
(ii) after "the secondary contributor" insert -
(ii) it is shown to the satisfaction of an officer of the Board that the earner knows that the secondary contributor has wilfully failed to pay the primary contribution which the secondary contributor was liable to pay on behalf of the earner and has not recovered that primary contribution from the earner"; and 23.After regulation 90 insert the following Part - Whether information has been delivered electronically 90A. - (1) For the purposes of these Regulations, information is taken to have been delivered to an official computer system by an approved method of electronic communications only if it is accepted by that official computer system. (2) References in these Regulations to information and to the delivery of information must be construed in accordance with section 135(8) of the Finance Act 2002 (mandatory e-filing). Proof of content of electronic delivery 90B. - (1) A document certified by the Board to be a printed-out version of any information delivered by an approved method of electronic communications is evidence, unless the contrary is proved, that the information -
(b) constitutes everything which was delivered on that occasion. (2) A document which purports to be a certificate given in accordance with paragraph (1) is presumed to be such a certificate unless the contrary is proved.
(b) the person receiving any information delivered by an approved method of electronic communications by the Board, is presumed, unless the contrary is proved, to be the person recorded as such on an official computer system.
(b) to an official computer system, on behalf of a person is taken to have been delivered by that person.
(b) by the Board, if the despatch of the information has been recorded on an official computer system. (2) The use of an approved method of electronic communications is presumed, unless the contrary is proved, not to have resulted in the delivery of information -
(b) by the Board, if the despatch of the information has not been recorded on an official computer system. (3) The time of receipt or despatch of any information delivered by an approved method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.
(b) by the Board, if the despatch of the payment has been recorded on an official computer system. (2) The use of a method of electronic communications is presumed, unless the contrary is proved, not to have resulted in the making of a payment -
(b) by the Board, if the despatch of the payment has not been recorded on an official computer system. (3) The time of receipt or despatch of any payment sent by a method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.
(b) the specified payment is received in full by the Board without unreasonable delay after the excuse ceased. (4) Inability to pay is not a reasonable excuse for the purposes of sub-paragraph (3)(a).
(b) a surcharge notice under regulation 90L, have been issued, is liable to a surcharge.
(b) B is the total of the amounts deducted from A under -
(ii) regulations 4, 5 and 6 of the Statutory Maternity Pay (Compensation of Employers) and Miscellaneous Amendment Regulations 1994, (iii) regulations 3 and 5 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002, (iv) regulation 2 of the Statutory Sick Pay (Compensation of Employers) and Miscellaneous Provisions Regulations 1983 and articles 2 and 3 of the Statutory Sick Pay Percentage Threshold Order 1995, and (v) regulation 44B of the Income Tax (Sub-contractors in the Construction Industry) Regulations1993; (c) the specified percentage is determined by reference to the number of the default during a surcharge period in accordance with Table 1.
(5) A surcharge period is a period which -
(b) ends at the end of a tax year in relation to which the employer has not been in default in respect of any specified payment. (6) A surcharge payable under this paragraph is payable 30 days after the issue of the surcharge notice.
(b) if earlier, the date on which the employer delivered a return in accordance with paragraph 22 of Schedule 4 (return by employer at end of year). (4) An employer may appeal against a surcharge notice by giving notice to the Board within 30 days of the issue of the surcharge notice.
(b) that the amount of the surcharge is incorrect. (6) But paragraph (5)(a) does not apply in respect of a disputed default which has already been the subject of an appeal under regulation 90J, following which the default notice was not withdrawn.
Mandatory use of electronic communications
(3) An employer is not liable to a penalty if the employer had -
(b) been subject to a penalty for failing to comply with regulation 205 of the PAYE Regulations (mandatory use of electronic communications), in relation to the same tax year. (4) A notice of appeal against a determination under section 100 of the Management Act of a penalty under this paragraph can only be on the grounds that -
(b) the amount of the penalty is incorrect, or (c) paragraph (3) applies. (5) Section 103A of the Management Act (interest on penalties) applies to penalties payable under this paragraph.
(b) section 31B (appeals to General Commissioners); (c) section 31D (election to bring appeal before Special Commissioners). (2) In an appeal under regulation 90J (appeal against default notice) or regulation 90L(4) (appeal against surcharge notice), the relevant place for the purposes of paragraph 3(1)(a) of Schedule 3 to the Management Act (rules for assigning proceedings to General Commissioners) is the place which at the time of the notice of appeal is -
(b) if there is no such place, the employer's place of residence in the United Kingdom. (3) In paragraph (2) -
(b) if more than one such place, the head office or place where it is mainly carried out; and
Interpretation 24.In regulation 103(1)(c) (Class 4 contributions in the case of earners treated as self-employed who would otherwise be employed earners) [29], for "under Schedule E", substitute "as general earnings".
(b) in paragraph (3) -
(ii) in sub-paragraph (b) for "regulation 52(1)(b) substitute "regulation 52A(1)". 27.In the heading to paragraph 13 of Schedule 2 for "from" substitute "to".
(b) in paragraph 2 (non-cash vouchers provided to employees of certain passenger transport undertakings) -
(ii) for "section 141(1) of the Taxes Act" to the end of the sentence, substitute "section 86 of ITEPA 2003 (transport vouchers under pre-26th March arrangements)."; (iii) for the words from "This paragraph applies", to the end of the paragraph, substitute -
(4) In Part 6 (pensions and pension contributions) -
2.A payment by way of employer's contribution towards a personal pension which is exempt from income tax by virtue of section 308(1) of ITEPA 2003 (exemption of contributions to approved personal pension arrangements).".
(iii) in sub-paragraph (c) for "applies; or" substitute "or sections 590 (annuities) and 591 (taxable pension income) of ITEPA 2003 apply; or". (5) In Part 7 (payments in respect of training and similar courses) -
(ii) for "an emolument" substitute "general earnings"; (b) in paragraph 3 (education and training funded by employers) -
(ii) for "an emolument" substitute "general earnings"; (c) after paragraph 9 [34] add -
10.A payment made to a participant in a Working Neighbourhoods Pilot, arranged under section 2(1) of the Employment and Training Act 1973[35], in his capacity as such. In-Work Credit 11.A payment made to a participant in an In-Work Credit scheme, arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.". (6) In Part 8 (travelling, relocation and other expenses and allowances of the employment) -
(ii) in sub-paragraph (2)(a)(ii), for the words from "for that purpose" to the end of the sub-paragraph substitute "by virtue of another provision of ITEPA 2003; or".
(ii) for "defray out of the emoluments of the office or employment" substitute "pay as the holder of that office or employment"; (iii) in sub-paragraph (a)(ii), for "paragraph 2 of Schedule 12A to the Taxes Act" substitute "section 338 of ITEPA 2003 (travel for necessary attendance)"; (iv) for sub-paragraph (b) substitute -
(c) for paragraphs 4 and 5 substitute -
4.A payment of, or a contribution towards, the expenses of the earner's employment to the extent that those expenses -
(b) would be so deductible if -
(ii) the earnings of the employment were subject to income tax as employment income under that Act. Travel between employments where duties performed abroad
(b) would be so deductible if -
(ii) the earnings of the employment were subject to income tax as employment income under that Act. Travel costs and expenses where duties performed abroad: earner's travel
(b) the amount which would be the included amount within the meaning of that section if the earner were resident and ordinarily resident in the United Kingdom. Travel costs and expenses where duties performed abroad: visiting spouse's or child's travel
(b) the amount which would be the included amount within the meaning of that section if the earner were resident and ordinarily resident in the United Kingdom. Foreign accommodation and subsistence costs and expenses (overseas employments)
(b) which would be so permitted if the earnings of the employment were subject to tax as employment income under ITEPA 2003. Travel costs and expenses of non-domiciled employee performing duties in the UK
(b) which would be so permitted if the earnings of the employment were subject to tax as employment income under ITEPA 2003."; (d) in paragraph 6 (travel expenses of workers on offshore gas and oil rigs) for the words from "the emoluments" to the end of the paragraph, substitute "general earnings under section 305 of ITEPA 2003 (offshore oil and gas workers: mainland transfers).";
(iii) in sub-paragraph (b) for "section 157(3)(c)" substitute "section 239(2)"; (iv) for "an emolument" substitute "general earnings"; and (v) omit "under Schedule E"; (f) in paragraph 7B (qualifying amounts of mileage payments in respect of cycles) [36] -
(ii) in sub-paragraph (3), for "section 197AD(2) of the Taxes Act" substitute "section 229(2) of ITEPA 2003". (g) in paragraph 7C (qualifying amounts of passenger payments) -
(bb) in paragraph (b) for "paragraph 5 of Schedule 12AA to the Taxes Act", substitute "section 234 of ITEPA 2003"; (ii) in sub-paragraph (3), for "section 197AE(2) of the Taxes Act" substitute "section 233(3) of ITEPA 2003"; (h) for paragraph 7D substitute -
7D.A payment by way of the provision of car fuel which is chargeable to income tax under section 149 of ITEPA 2003.";
(ii) for "an emolument" substitute "general earnings"; (j) in paragraph 10 (council tax on accommodation provided for employee's use) -
(ii) for "he is not liable to tax" substitute " he is not liable to income tax"; (k) in paragraphs 10 and 11 (rates on accommodation provided for employees' use in Northern Ireland) -
(ii) omit "under Schedule E"; (l) in paragraph 11 for "rates", where it occurs in the heading and the paragraph, substitute "rates or water or sewerage charges";
15.A payment in respect of daily subsistence allowances paid by the European Commission to persons whose services are made available to the Commission by their employers under the detached national experts scheme which is exempt from income tax by virtue of section 304 of ITEPA 2003 (experts seconded to European Commission).". (7) In Part 10 (miscellaneous and supplemental) -
(ii) for sub-paragraphs (1) and (2) substitute -
(2) If a payment is made by way of incidental overnight expenses in connection with a qualifying period, but the amount of that payment (calculated in accordance with section 241 of ITEPA 2003) exceeds the permitted amount, sub-paragraphs (3) to (6) apply.";
8.A payment which is not charged to tax by virtue of any of the following provisions of ITEPA 2003 -
(b) section 245 (travelling and subsistence during public transport strikes); (c) section 246 (transport between work and home for disabled employees: general); (d) section 248 (transport home: late night working and failure of car-sharing arrangements)."; (c) for paragraph 10 substitute -
10.A payment which by virtue of section 346 of ITEPA 2003 (deduction for employee liabilities) is deductible from the general earnings of the employment chargeable to tax under that Act.";
14. - (1) A payment in lieu of the provision of coal or smokeless fuel, if the employee is -
(b) a former colliery worker; and the condition in sub-paragraph (2) is met. 29. - (1) Schedule 4 is amended as follows. 30. - (1) Part 1 (general) is amended as follows.
(2) In this Schedule, except where the context otherwise requires -
(b) under regulation 5 of, and Schedule 3 to, the Social Security (Categorisation of Earners) Regulations 1978[41]; or (c) under regulation 122;
(3) For paragraph 2 substitute -
2. - (1) If -
(b) no improper purpose notice has been given, or if one has been given it has been withdrawn, he shall be treated as having made an identical election for the purposes of this Schedule. (4) In paragraph 3 (intermediate employers) -
(b) in sub-paragraph (3) -
(ii) in paragraph (a) for "the emoluments" substitute "those earnings"; and (iii) in paragraph (b) for "the said emoluments" substitute "those earnings"; and (c) in sub-paragraph (4), for "section 203E of the Taxes Act", substitute "section 691 of ITEPA 2003". (5) In paragraph 4A[43], for "emoluments", wherever it occurs, substitute "general earnings".
5.Any legal proceedings or administrative act authorised by or done for the purposes of this Schedule and begun by one Inland Revenue officer may be continued by another officer, and any officer may act for any division or other area.". 31. - (1) Part 2 (deduction of earnings related contributions) is amended as follows.
(b) in sub-paragraph (1)(a) for "regulation 20 of the Income Tax Regulations (employee on fixed pay)" substitute "regulation 35 of the PAYE Regulations (simplified deduction scheme)". (3) In paragraph 7 (calculation of deduction)[44] -
(b) in sub-paragraph (3) after "paragraph (b)" in the second place it occurs insert "or sub-paragraph 4(a) or (f)"; (c) in sub-paragraph (4) -
(ii) after paragraph (e) insert -
(f) the payment in question is made to a person whose place of employment is outside the United Kingdom and on whose general earnings Class 1 contributions are, but income tax is not, payable."; (d) in sub-paragraph (5A)(a) after "(4)(e)" add "or (f)";
(ii) in sub-paragraph (ii) for "regulation 22(3)" substitute "regulation 22(5), (6) or (7)"; and (iii) in sub-paragraph (iii) for "section 135 of the Taxes Act 1988 (gains by directors and employees from share options)" substitute "section 4(4)(a) of the Act"; (f) omit sub-paragraph (10); (4) In paragraph 9 (certificate of contributions paid)[45] -
(ii) for "Board" substitute "Inland Revenue"; and (b) in sub-paragraph (2) -
(ii) for "emoluments" substitute "general earnings"; and (iii) after "concerned" insert "or the employee was not in the employer's employment on the last day of the tax year,". 32. - (1) Part 3 (payment and recovery of earnings-related contributions, Class 1A contributions and Class 1B contributions, etc.) is amended as follows.
(ii) after "14 days" insert "or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, within 17 days"; and (iii) omit "income"; (b) in sub-paragraph (2) -
(ii) omit "income"; and (c) in sub-paragraph (3) for "emoluments" substitute "general earnings". (3) In paragraph 11 (payment of earnings-related contributions quarterly by employer)[46] -
(ii) omit "income"; (iii) after "tax quarter" insert -
(iv) omit sub-paragraph (1)(b); (b) in sub-paragraph (2) -
(ii) omit "income"; (c) in sub-paragraph (3), for "or emoluments", substitute "of general earnings";
(ii) for "Collector", wherever it occurs, substitute "Inland Revenue"; (iii) for "regulation 40 of the Income Tax Regulations" substitute "regulation 68 of the PAYE Regulations"; and (iv) for "the Board" substitute "the Inland Revenue". (4) In paragraph 12 (payment of earnings-related contributions by employer: further provisions)
(ii) for "emoluments", wherever it occurs, substitute "general earnings". (5) In paragraph 13 (payment of Class 1B contributions) -
(b) for "Collector", wherever it occurs, substitute "Inland Revenue"; and (c) in sub-paragraph (2) omit "income". (6) In paragraph 14 (employer failing to pay earnings-related contributions) -
(b) for "Collector", wherever it occurs, substitute "Inland Revenue"; (c) omit "income" wherever it occurs; and (d) in sub-paragraph (3) omit "to him" wherever the words occur. (7) In paragraph 15 (specified amount of earnings-related contributions payable by the employer) -
(ii) for "his judgment" substitute "their judgment"; and (iii) for "he considers" substitute "they consider"; (b) for "Collector", wherever it occurs, substitute "Inland Revenue"; (8) In paragraph 16 (recovery of earnings-related contributions or Class 1B contributions) -
(ii) for "under Schedule E", substitute "as employment income under ITEPA 2003"; (b) for "Collector", wherever it occurs, substitute "Inland Revenue"; and (9) In paragraph 17 (interest on overdue earnings-related contributions or Class 1B contributions) -
(ii) in paragraph (a) after "14 days" insert "or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, 17 days"; (iii) in paragraph (b) after "19th October" insert "or, if payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, not later than 22nd October"; (b) in sub-paragraph (2) for "Collector" substitute "Inland Revenue";
(ii) in sub-paragraph (ii) after "the 19th October" insert "or, if payment was made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, the 22nd October". (d) for sub-paragraph (5) substitute -
(10) After paragraph 17 insert -
17A. - (1) If regulation 86(1)(a) applies paragraphs 16 and 17 shall apply to the employed earner to the extent of the primary contribution which the secondary contributor wilfully failed to pay. (2) For the purpose of sub-paragraph (1) any reference in paragraph 16 and 17 to an employer shall be construed as a reference to the employed earner.". (11) In paragraph 19(b) (repayment of interest on contributions which are repaid) for "52 or 55" substitute "52, 52A or 55".
(c) for "Collector", wherever it occurs, substitute "Inland Revenue". (13) In paragraph 23 (additional return by employer at end of year where liability transferred to employed earner: gains from employment-related securities options)[48] -
(b) in sub-paragraph (2), for the words from "Not later than" to "Inspector", substitute "Before 7th July after the end of the year the employer shall deliver to the Inland Revenue"; (c) in sub-paragraph (3)(c) for "Collector", substitute "Inland Revenue". (14) In paragraph 24 (special return by employer at end of voyage period) -
(b) for "emoluments", wherever it occurs, substitute "general earnings". (15) In paragraph 25 (return by employer of recovery under the Statutory Sick Pay Percentage Threshold Order) omit "income" wherever it occurs.
(b) omit "income" wherever it occurs; (c) for "Collector", wherever it occurs other than as provided for in sub-paragraph (d) below, substitute "Inland Revenue"; (d) in sub-paragraph (1) for "Board" substitute "Inland Revenue"; (e) in sub-paragraph (4), for "The Collector may", substitute "The authorised officer may"; (f) in sub-paragraph (6), for "regulation 20 of the Income Tax Regulations", substitute "regulation 35 of the PAYE regulations"; (17) In paragraphs 27 and 28 (death of an employer and succession to a business) for "emoluments", wherever it occurs, substitute "general earnings".
(b) in sub-paragraph (2), for "emoluments", where it first occurs, substitute "general earnings"; and where it subsequently occurs, substitute "earnings"; (c) in sub-paragraph (3), for "emoluments", substitute "general earnings"; (d) in sub-paragraph (4), for "emoluments" where it first occurs, substitute "general earnings", and where it subsequently occurs, substitute "earnings"; (e) in sub-paragraph (5), for "emoluments" where it first occurs, substitute "general earnings", and where it subsequently occurs, substitute "earnings"; (f) in sub-paragraph (6) -
(ii) for "the Inspector or, if so required to the Collector, in such form as the Board may prescribe", substitute "the Inland Revenue, in such form as they may prescribe"; (g) in sub-paragraph (7) -
(ii) for "the Inspector or, if so required, to the Collector, in such form as the Board may prescribe" substitute "the Inland Revenue, in such form as they may prescribe"; and (iii) for "emoluments" substitute "general earnings". Amendment to the Categorisation Regulations and the Northern Ireland Categorisation Regulations
(b) the cash equivalent determined in accordance with section 398(2)(b) of ITEPA 2003.". (5) In regulation 5(1)(b)(i) (meaning of intermediary), for "under Schedule E", substitute "as employment income under ITEPA 2003".
(This note is not part of the Regulations) These Regulations amend the provisions of the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004: "the principal Regulations"). They reflect the re-writing of tax legislation dealing with employment income by the Income Tax (Earnings and Pensions) Act 2003 (c. 1: "ITEPA 2003") and the replacement of the Income Tax (Employments) Regulations 1993 (S.I. 1993/744) by the Income Tax (Pay As You Earn) Regulations 2003(S.I. 2003/2682: "the PAYE Regulations). They also amend the provisions of the principal Regulations dealing with the refund of contributions to ensure that, in the light of changes to the structure of the National Insurance contributions system by the National Insurance (Contributions) Act 2002, those provisions enable the appropriate calculations to be made. Further changes are made in respect of the time during which contributions may be recovered from an employed earner, and the circumstances in which a primary contribution may be recovered directly from a primary contributor. Regulation 1 provides for the citation, commencement, effect and interpretation of these Regulations. Regulation 2 introduces the amendments to the principal Regulations. Regulation 3 amends the definitions in regulation 1(2) of the principal Regulations, mainly in consequence of changes made by ITEPA 2003. Regulations 4 to 10 make amendments which are, in the main, consequential upon changes made by ITEPA 2003. Regulation 12 substitutes two new regulations (52 and 52A) which specify the amounts to be refunded to contributors in case of error and excess payments respectively. The main changes are that payments made in error and excess payments are now dealt with in separate provisions and, in the case of excess payments, contributions payable at different rates are dealt with separately. Regulations 11, 14 and 26 make amendments consequent on this restructuring. Regulations 13, 15, 17, 18, 20 and 24 to 33 make other amendments consequential upon changes made by ITEPA 2003. Regulation 22 extends the scope of regulation 86 of the principal Regulations to enable recovery of primary Class 1 contributions directly from an earner where an officer of the Board is satisfied that the earner knows of the secondary contributor's wilful failure to pay the contribution and of his failure to collect it from the earner. Regulations 16 to 21 and 23 make amendments to mirror, in relation to the collection of contributions, requirements for the electronic delivery of information and payments in respect of income subject to PAYE recovery contained in Part 10 of the PAYE Regulations. Regulation 28 also makes amendments providing further disregards in Schedule 3 to the principal Regulations in respect of the introduction of Working Neighbourhoods Pilots and the In-Work Credit Pilot Scheme, and in respect of payments by way of daily subsistence allowance paid by the European Commission. Regulation 31 also extends, by a year, the time limit for an employer to recover primary Class 1 contributions from the earner's future earnings where there has been an error in good faith or where the employee is employed outside the United Kingdom and Class 1 contributions are, but income tax is not, payable upon their earnings. Regulations 34 and 35 make amendments to the Social Security (Categorisation of Earners) Regulations 1978 (S.I. 1978/1689) and the Social Security (Contributions) (Intermediaries) Regulations 2000 (S.I. 2000/727) and their equivalents in Northern Ireland, in each case as a consequence of the rewriting of tax provisions by ITEPA 2003 and the PAYE Regulations. Regulation 36 provides for the Schedule of revocations to have effect. These Regulations do not impose any new costs on business. Notes: [1]1992 c. 4. Section 2 has been amended. Relevant amendments were made to subsection (1) by paragraph 171 of Schedule 6 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1: "ITEPA 2003") and subsection (2A) was inserted by paragraph 2 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2: "the Transfer Act") and substituted by paragraph 2 of Schedule 11 to the Welfare Reform and Pensions Act 1999 (c. 30: "the Welfare Reform Act"). Section 3 has been amended: subsection (2A) was inserted by section 48 of the Social Security Act 1998 (c. 14: "the 1998 Act"). Section 4 has been amended. Subsection (6) was substituted by section 74(3) of the Child Support, Pensions and Social Security Act 2000 (c. 19: "the 2000 Act") and subsection (7) was inserted by paragraph 4 of Schedule 3 to the Transfer Act. Section 4A was inserted by section 75 of the Welfare Reform and Pensions Act 1999 (c. 30) and amended by articles 3 and 4 of S.I. 2003/1874. Section 10 was substituted by section 74(2) of the 2000 Act and relevantly amended by paragraph 174 of Schedule 6 to the ITEPA 2003. Section 10A was inserted by section 53 of the 1998 Act and relevantly amended by paragraph 11 of Schedule 3 to the Transfer Act. Section 19 has been amended. Subsection (1) was amended by paragraph 5 of Schedule 1 to the National Insurance Contributions Act 2002 (c. 19: "the 2002 Act"). Subsection (5A) was inserted by paragraph 19(2) of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2: "the Transfer Act"). Section 122(1) is cited because of the meaning it ascribes to "prescribe". Section 175(4) was amended by paragraph 29(4) of Schedule 3 to the Transfer Act. Paragraph 7B was inserted by section 57 of the 1998 Act and amended by paragraph 38 of Schedule 3, paragraph 7 of Schedule 9 and Schedule 10 to the Transfer Act and section 76(3) and (4) of the 2000 Act. Paragraph 8(1)(ia) was inserted by paragraph 77(15) of Schedule 7 to the 1998 Act and amended by section 74(5) of the 2000 Act. Sub-paragraph (1) was also amended, and sub-paragraph (1A) inserted, by paragraph 39 of Schedule 3 to the Transfer Act.back [2]1992 c. 7 ("the 1992 Northern Ireland Act"). Section 2 has been amended. Relevant amendments were made to subsection (1) by paragraph 192 of Schedule 6 to ITEPA 2003, and subsection (2A) was inserted by paragraph 2 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (S.I. 1999/671: "the Transfer Order") and substituted by paragraph 10 of Schedule 11 to the Welfare Reform Act. Section 3 has been amended: relevant amendments are those made by Article 45 of the Social Security (Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10: "the 1998 Order") and paragraph 4 of Schedule 3 to the Transfer Order. Section 4 has been amended. Subsection (6) was substituted by section 78(3) of the 2000 Act and subsection (7) was inserted by paragraph 5 of Schedule 3 to the Transfer Order. Section 4A was inserted by section 76 of the Welfare Reform and Pensions Act. and amended by Articles 3 and 4 of S.I. 2003/1884. Section 10 was substituted by section 78(2) of the 2000 Act and relevantly amended by paragraph 195 of Schedule 6 to ITEPA 2003. Section 10A was inserted by Article 50 of the 1998 Order and relevantly amended by paragraph 198 of Schedule 6 to ITEPA 2003. Section 19 has been amended. Subsection (1) was amended by paragraph 24 of Schedule 1 to the 2002 Act. Subsection (5A) was inserted by paragraph 19(2) of Schedule 3 to the Transfer Order. Section 121(1) is cited because of the meaning it ascribes to "prescribe". Section 171(10) was substituted by paragraph 28(3) of Schedule 3 to the Transfer Order. Paragraph 7B was inserted by Article 54 of the 1998 Order and amended by paragraph 37 of Schedule 3, paragraph 5 of Schedule 8 and Schedule 9 to the Transfer Order and section 80(3) and (4) of the 2000 Act. Paragraph 8(1(ia) was inserted by paragraph 58(25) of Schedule 6 to the 1998 Order and amended by section 78(5) of the 2000 Act. Sub-paragraph (1) was amended and sub-paragraph (1A) was inserted, by paragraph 38 of Schedule 3 to the Transfer Order.back [3]The functions of the Department of Health and Social Services for Northern Ireland under the 1992 Northern Ireland Act were transferred to the Department for Social Development by Article 8(b) of, and Part II of Schedule 6 to the Departments (Transfer and Assignment of Functions) Order (Northern Ireland) 1999 (S.R. 1999 No. 481).back [4]Section 18(1) was amended by paragraph 18 of Schedule 3 to the Transfer Act. Paragraph 3 has been amended: sub-paragraph (1) was amended by paragraph 77(5) of Schedule 6 to the 1998 Act and paragraph 33 of Schedule 3 to the Transfer Act; sub-paragraph (3) was amended by section 55(a) of the Social Security Act 1998 (c. 14) ("the 1998 Act") and sub-paragraph (6) was inserted by paragraph 33 of Schedule 3 to the Transfer Act. Paragraph 6(1) was amended by paragraph 77(8) of Schedule 7 to the 1998 Act, paragraph 35(2) of Schedule 3 to the Transfer Act and paragraph 185(a) and (b) of Schedule 6 to ITEPA 2003.back [5]Section 18(1) has been amended by paragraph 18 of Schedule 3 to the Transfer Order Paragraph 3has been amended: sub-paragraph (1) was amended by paragraph 58(5) of Schedule 6 to the 1998 Order and paragraph 32(3) of Schedule 1 to the 2002 Act; sub-paragraph(3) was amended by Article 52(a) of the 1998 Order and sub-paragraph (6) was added by paragraph 32 of Schedule 3 to the Transfer Order. Paragraph 6(1) was amended by paragraph 58(8) of Schedule 6 to the 1998 Order, paragraph 34(2) of Schedule 3 to the Transfer Order and paragraph 204(a) and (b) of Schedule 6 to the Income Tax (Earnings and Pensions) Act 2003.back [6]S.I. 1978/1689.back [7]S.R. 1978 No. 401.back [8]S.I. 2001/1004: regulation 156(3) of the principal Regulations provides a rule of construction, in relation to their application to Northern Ireland, of references to enactments applying only in Great Britain.back [9]S.I. 2000/727.back [10]S.I. 2000/728.back [11]The definition of "business travel" was inserted by regulations 2 and 3 of S. I. 2002/307.back [12]i.e. the Income Tax (Earnings and Pensions) Act 2003 (c. 1): see section 122(1) of the 1992 Act as amended by paragraph 199 of Schedule 6 to ITEPA 2003..back [13]Chapter 2 of Part 7 of ITEPA 2003 was substituted by paragraph 3(1) of Schedule 22 to the Finance Act 2003 (c. 14).back [14]S.I. 2003/2682.back [15]Regulation 22A was inserted by regulations 2 and 5 of S.I. 2002/307.back [16]Regulation 40(2) was amended by regulations 2 and 3 of S.I. 2001/2412 and regulations 3 and 6 of S.I. 2003/2085.back [17]Regulation 40(6) was amended by regulations 3 and 6 of S.I. 2003/2085.back [18]Part 10 of the Children Act 1989 ceased to apply to England and Wales by virtue of section 79(5) of the Care Standards Act 2000 (c. 14). That section took effect, in respect of England, on 2nd July 1991 (S.I. 2001/2041), and in respect of Wales, on 1st April 2002 (S.I. 2002/920).back [19]Part 10A of the Children Act 1989 was inserted by section 79(1) of the Care Standards Act 2000.back [20]Regulation 52 was substituted by regulation 8 of S.I. 2002/2366.back [21]S.I. 1996/1245: regulation 3 was amended by Schedule 2 to the Transfer Act.back [22]I.e. the Pension Schemes Act 1993 (see regulation 1(2) of the principal Regulations). Section 41 has been amended by paragraph 127 of Schedule 7 to the 1998 Act, paragraph 6 of Schedule 9 to the Welfare Reform Act and paragraph 36 of Schedule 1 to the 2002 Act.back [23]Section 42A was inserted by section 137(5) of the Pensions Act 1995 (c. 26) and subsections (1) and (2) were substituted by paragraph 128 of Schedule 7 to the Social Security Act 1995 and paragraph 7 of Part 2 of Schedule 9 to the Welfare Reform Act.back [24]Section 44(1) has been amended section 164 of the Pensions Act 1995 and paragraph 48 of Schedule 1 to the Transfer Act.back [25]Regulation 55 was amended by regulations 3 and 10 of S.I. 2002/2366.back [26]Paragraphs (1A) to (1F) of regulation 80 were inserted by regulations 2 and 3 of S.I. 2001/2187.back [27]Regulation 80A was inserted by regulation 4 of S.I. 2001/2187.back [28]1970 c. 9.back [29]Regulation 103 was amended by regulations 2 and 15 of S.I. 2003/193.back [30]Inserted by regulation 18 of S.I. 2002/2366.back [31]Paragraph 1(2) was substituted by regulation 6 of S.1. 2002/307.back [32]Part 10 of the Children Act 1989 ceased to apply to England and Wales by virtue of section 79(5) of the Care Standards Act 2000 (c. 14). That section took effect, in respect of England, on 2nd July 2001 (S.I. 2001/2041), and in respect of Wales, on 1st April 2002 (S.I. 2002/920).back [33]Part 10A of the Children Act 1989 was inserted by section 79(1) of the Care Standards Act 2000.back [34]Paragraph 9 was inserted by regulation 2(3) of S.I. 2003/2340 and substituted by regulation 5(3) of S.I. 2003/2958.back [35]1973 c. 50: section 2 was substituted by section 25(1) of the Employment Act 1988 (c. 19). There are amendments to section 2 which are not relevant for present purposes.back [36]Paragraphs 7A to 7D were inserted by regulations 2 and 7 of S.I. 2002/307.back [37]S.I. 2003/2682.back [38]Sections 592(7) and 594(1) were amended by paragraphs 72 and 73 of Schedule 6 to ITEPA 2003.back [39]S.I. 1994/1882.back [40]S.I. 1995/512.back [41]S.I. 1978/1689: Schedule 3 has been amended by S.I. 1984/1894, 1994/726, 1998/1728, 1999/3 and 2003/736 and 2420.back [42]S.I 1996/195, amended by Part 2 of Schedule 10 to the Transfer Act and regulation 2 of S.I.1999/286.back [43]Paragraph 4A was inserted by regulation 6 of S.I. 2002/2929.back [44]Paragraph 7 has been amended: relevant amendments are made by regulation 7 of S.I. 2002/2929, and regulation 2 of S.I. 2003/1337.back [45]Paragraph 9 has been amended by regulations 2 and 16 of S.I. 2003/193, and regulation 3 of S.I. 2003/1337.back [46]Sub-paragraph (4) of paragraph 11 was substituted by regulations 2 and 16 of S.I. 2003/193.back [47]In sub-paragraph (1)(c)(i) of paragraph 22, words "subparagraphs (i) to (iv)" were substituted, and sub-paragraphs (1)(c)(ii) revoked, by regulations 2 and 16 of S.I. 2003/193. In sub-paragraphs (1)(d) and (2)(d) the word "omitted" was revoked, and sub-paragraphs (1)(da), (db), (2)(da) and (db) were inserted, by regulations 2 and 16 of S.I. 2003/193.back [48]Paragraph 23 and the heading were amended by S.I. 2003/2085.back [49]Sub-paragraph (3A) of paragraph 26 was inserted by regulation 16 of S.I. 2003/193.back [50]Paragraph 5A of the Schedule to the Categorisation Regulations was inserted by regulation 3(b) of S.I. 1998/1728 (which was itself amended by regulation 2 of S. I. 1999/3) and was subsequently amended by regulation 3 of S.I. 2003/736. Paragraph 5A of the Schedule to the Northern Ireland Categorisation Regulations was inserted by regulation 3(b) of S.R. 1998/250 (which was itself amended by regulation 2 of S.I. 1999/2) and was subsequently amended by regulation 3 of S.I. 2003/733.back [51]Paragraph 10 was inserted by regulation 4 of S.I. 1998/1728 (which was itself amended by regulation 2 of S.I. 1999/3) and was subsequently amended by regulation 4 of S.I. 2003/736.back [52]Paragraph 8 was inserted by regulation 4 of S.I. 1998/250 (which was itself amended by regulation 2 of S.I. 1999/2) and was subsequently amended by regulation 4 of S.I. 2003/733.back [53]Regulation 7 of the Intermediaries Regulations was amended by regulations 4 of S.I. 2002/703 and regulation 6 of S.I. 2003/2079., and regulation 7 of the Northern Ireland Intermediaries Regulations was amended by regulation 4 of S.I. 2002/705 and regulation 6 of 2003/2080.back [54]S.I. 2000/728. Regulations 2(4) and 7 were amended by regulations 4 and 6 of S.I. 2003/2080.back [55]Regulation 80A was inserted by regulation 4 of S.I 2001/2187back [56]These Regulations became spent on the substitution of section 10(7) of the Social Security Contributions and Benefits Act 1992 by paragraph 174(9) of Schedule 6 to ITEPA 2003.back [57]These Regulations became spent on the substitution of section 10(7) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 by paragraph 195(9) of Schedule 6 to ITEPA 2003.back ISBN0 11 048923 3 -- Back --
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