PAYE on retrospective notional payments


2006 tax avoidance measures unlikely to trigger liabilities until early 2007

In our news item in an August newsletter, we explained the measure contained in the Finance Act 2006 that requires the PAYE rules for handling notional payments to be applied where a tax charge arises following the introduction of the new retrospective tax avoidance legislation. The date

• that fixes the tax period within which the employer must remit all of the retrospective tax owed, and
  
  
• from which the 90 days period runs, within which the employee with the tax charge must pay all of the PAYE tax owed to the employer,

is the date on which the Finance Act containing the new tax avoidance legislation comes into force. The Finance Act 2006 came into force on 19 July 2006.

In a recent announcement on 18 September, HMRC has explained that, exceptionally, the date that the retrospective tax avoidance measures introduced by the Finance Act 2006 comes into force has yet to be decided. The intention is to lay the regulations relating to the collection of retrospective tax simultaneously with those relating to the collection of retrospective National Insurance contributions. The latter are currently out for consultation and the earliest that both sets of regulations can come into force will not be until early 2007.

...back to 28 October 2006

Further information:
PAYE on retrospective notional payments

The UK Payroll News is sponsored by HRD & Payroll Solutions

Discuss this news item in the PayPerShop Forum