SE21792 - Benefits: PAYE tax not deducted from director's emoluments: circumstances in which a charge under the special rules arises

Where there has been a failure to deduct tax from remuneration of certain directors ( SE21791) the special charge in Section 164 ICTA 1988 arises where on or after 6 April 1983:

• a person on making a payment of emoluments to a director within SE21791 fails to deduct the full amount of PAYE tax he should deduct when making the payment and
• the tax which has not been deducted is paid to the Revenue by someone other than the director and
• the director does not make good all the tax paid to the Revenue by that person ( SE21120 to SE21122).

The person failing to deduct tax and who subsequently pays it to the Revenue will nearly always be the employer.

See SE11800 onwards where the failure to deduct tax is in respect of a readily convertible asset.