Where a relevant event occurs (see
ESM3180) the deemed payment is treated as
made at the time of that event. In such cases PAYE should be
operated in respect of the tax and NICs due as for any payment of
salary. The liability should be paid to the Revenue in the normal
monthly or quarterly way and a P45 completed as for any other case.
If there is any delay in calculating a deemed payment where
there is a cessation requiring a P45, then there is no objection to
the P45 being issued ignoring the deemed payment, or including a
provisional amount. When the correct amount is known, any
adjustment to the amount of tax due can be made under regulation 24
of the PAYE regulations.
Regulation 24 provides for tax to be deducted at basic rate
from payments made to an ex-employee after a P45 has been issued.
There is no amended P45. Where this occurs page 15 of the
Employer’s Further Guide to PAYE and NICs (CWG2(2001))
advises the employer to notify the Tax Office in writing with a
copy to the employee; so the worker should not be unaware of a
deemed payment.
If, before the deemed payment is calculated, there has been
no office or employment where Schedule E/employment income was
paid, so that there is no code number for the year, the
intermediary does not need to issue a P45 simply because the deemed
payment is linked to a cessation. But tax at the basic rate and
NICs has to be accounted for to the Inland Revenue within 14 days
of the end of the income tax month in which the deemed payment is
treated as made.
There is no equivalent to the extra time allowed to
calculate the deemed payment at the end of the year. So we require
the P35 and the P14s due on 19 May to include the correct figures
in respect of in-year deemed payments and the tax and NICs in
respect of them.
