Guidance

Remuneration in non-cash form (480: Chapter 26)

Find out about remuneration in non-cash form, for example, payments by intermediaries.

PAYE tax not borne by the employee

26.1

Part 11 Chapters 3 and 4

In some circumstances the PAYE rules deem an employer (or other person providing income to an employee) to have made a payment of income on which PAYE must be accounted. These include:

Section 687

  • payments made by an intermediary of the employer

Section 689

  • payments made to an employee of a non-UK employer

Section 690

  • some payments to non-resident employees

Section 691

  • some payments for a mobile UK workforce

Section 696, Sections 693 to 695

  • income provided in the form of a readily convertible asset (such as shares or securities)

Sections 687A and 695A

  • the provision of certain vouchers and some occasions when an employee uses a credit card or other token
  • the provision of certain employment income through third parties – see chapter 1 paragraphs 1.16 to 1.23

The PAYE must be paid to HMRC whether or not the ‘employer’ has recouped that amount from the employee by deduction from cash wages or otherwise.

26.2

Section 222 ITEPA 2003

If any part of the PAYE tax is not recovered from the employee within 90 days after the end of the tax year in which the payment of income is treated as having been made (for example, 6 July), the amount of PAYE which could not physically be deducted from the employee’s pay in the relevant Income Tax period (for example, weekly or monthly) is treated as additional income.

26.3

Regulation 22(4) SS(C)R 2001

The amount of PAYE that has not physically been deducted from cash earnings and which has not been recovered by the employer within 90 days after the end of the tax year in which the relevant payment of income is treated as having been made (for example, 6 July) will also be liable to Class 1 National Insurance contributions in the earnings period containing the 6 July.

Updates to this page

Published 30 December 2019

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