|
The Inland Revenue has today published draft
regulations (PDF file 104K) that provide for mandatory electronic
payment by large employers.
Comments on these draft regulations should be sent, by 5 September 2003,
to:
Chris Davis
Revenue Policy, Cross Cutting Policy
S23 West Wing
Somerset House
London
WC2B 6ES
email: chris.davis@ir.gsi.gov.uk
Please mark your email "consultation on draft e-payment regulations"
Your comments may be made public unless you indicate that you would prefer
them to remain confidential.
The final version of the regulations will be made in September 2003
Background
In Budget 2003, it was announced that large employers (those with 250 or
more employees) will be required to pay electronically from April 2004.
At the same time the Inland Revenue will introduce a later due date for
electronic payments made by all employers. This will compensate for the
loss of cash flow advantage offered by cheque payment. It will also encourage
smaller employers to adopt e-payment voluntarily.
Regulatory Impact Assessment
A partial regulatory impact assessment covering these measures was published
in April 2003 and is available at www.inlandrevenue.gov.uk/ria/large_employers.pdf
Comments on that assessment are welcome and should be sent to Chris Davis
at the address given above.
CIS deductions, NICs, and Student Loan Repayments
The draft Income Tax (Employments) (Amendment No. ) Regulations 2003 provide
for mandatory electronic payment of PAYE tax. When these draft regulations
have been finalised parallel regulations will be made to replicate the PAYE
tax provisions for payments of CIS deductions, National Insurance contributions
and student loans repayments made by large employers.
Board's Directions
The draft regulations provide for the Board of Inland Revenue to make
directions about
- "the specified date" on which the number of employees working
for an employer will be counted (draft regulation 42A), and
- the means of electronic payment approved for the making of payments
(draft regulation 2D(4)).
We expect that for the 2004/05 tax year the Board will direct that
- The specified date will be in the autumn of 2003. The date will be
the same date as that specified for the purposes of the mandatory electronic
filing provisions. We will give a clearer idea of the likely date in
the coming weeks and this note will be updated then.
- The approved methods of electronic payment for use by large employers
will include BACS (Banker's Automated Credit Service) and CHAPS (Clearing
House Automated Payments System). Other methods of electronic payment
may also be approved.
Mandatory Electronic Filing For Large And Medium Sized Employers, Incentives
For Small Employers.
In April 2002, the Chancellor announced that employers with 250 or more
employees will be required to send their 2004/05, and subsequent, end
of year returns electronically. Employers with 50 to 249 employees will
be required to send their end of year returns electronically for 2005/06
and later years.
Small employers with fewer than 50 employees will be required to send
their end of year returns electronically from 2009/10. In the meantime,
those small employers who successfully send in their returns electronically,
directly or via a payroll intermediary, will receive an incentive payment,
each year between 2005 and 2009, for doing so.
The draft regulations for these measures were published in April. They
are also available on the Consultation area of this website and comments
are invited by 7 July 2003.
Interaction with the Rewrite of the PAYE Regulations
The Income Tax (Employments) (Amendment No. ) Regulations 2003 will amend
the current PAYE regulations (SI 1993/744). The Tax Law Rewrite project
are rewriting those regulations and their latest draft was published in
April. That draft does not include the provisions for mandatory electronic
payment (or mandatory electronic filing), but they will be included, rewritten
as necessary, in the final version of the new PAYE regulations when they
are made later this year.
|
