EIM11890 – PAYE: special type of income:
the amount on which to operate PAYE
Section 696(2) ITEPA 2003
Where PAYE income of an employee is provided in the form of a
readily convertible asset and the employer is required to operate
PAYE by virtue of Section 696(1) ITEPA 2003, Section 696(2) says
that the amount is the income likely to be PAYE income (see
EIM11891).
The employer may be unable to calculate the exact amount. If
so, PAYE must be operated on the best estimate the employer can
reasonably make (see
EIM11892).
The amount on which to operate PAYE: specific events
The same principles apply for calculating the amount on which
PAYE must be operated where PAYE income of an employee is provided
in the form of:
- the enhancement by the employer of an
asset that the employee already owns (see
EIM11860), or
- an event occurring before 1 September 2003
or in respect of conditional shares acquired before 16 April 2003
giving rise to a charge under Section 427 ITEPA 2003 (conditional
shares, see
EIM11865)
- an event occurring on or after 1 September
2003 giving rise to a charge under Part 7 Chapter 2 ITEPA 2003
(restricted securities, see
EIM12220)
- an event occurring before 1 September 2003
giving rise to a charge under Section 438 ITEPA 2003 (convertible
shares, see
EIM11870)
- an event occurring on or after 1 September
2003 giving rise to a charge under Part 7 Chapter 3 ITEPA 2003
(convertible securities, see
EIM12230)
- an event occurring before 1 September 2003
giving rise to a charge under Section 477 ITEPA 2003 (share
options, see
EIM11875)
- an event occurring on or after 1 September
2003 in respect of securities options that are share options giving
rise to a charge to tax under Part 7 Chapter 5 ITEPA 2003
(securities options, see EIM12290)
- an event occurring on or after 16 April
2003 in respect of securities options that are not share options
giving rise to a charge to tax under Part 7 Chapter 5 ITEPA 2003
(securities options, see EIM12295).
The amount is the value or best estimate that can reasonably be
made of the amount chargeable to tax as employment income.
