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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    493

 

              “(1A)                In subsection (1) “earnings or amounts treated as earnings” means

earnings or amounts treated as earnings which constitute

employment income (see section 7(2)(a) or (b) of the Income Tax

(Earnings and Pensions) Act 2003).”

Taxes Management Act 1970 (c. 9)

5

  123      The Taxes Management Act 1970 is amended as follows.

  124      In section 7(4) and (5) (notice of liability to income tax and capital gains tax)

for “section 203 of the principal Act” substitute “PAYE regulations”.

  125     (1)      Amend section 9 (returns to include self-assessment) as follows.

          (2)      In subsection (1) for “, 547(5) or 599A(5) of the principal Act” substitute “or

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547(5) of the principal Act or section 626 of ITEPA 2003”.

          (3)      In subsection (1A) after “the principal Act” insert “or under section 394(2) of

ITEPA 2003”.

  126     (1)      Amend section 15 (return of employee’s emoluments etc.) as follows.

          (2)      For the sidenote to the section substitute “Return of employees’ earnings

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etc.”

          (3)      In subsection (3)(a) for “employment to which Chapter II of Part V of the

principal Act applies” substitute “employment which, for the purposes of

the benefits code in ITEPA 2003, is a taxable employment under Part 2 of that

Act (see section 66) but is not an excluded employment (see section 63 of that

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Act)”.

          (4)      In subsection (8)(a) for “the relevant sections, that is to say, sections 141, 142,

143, 144A, 145, 146 and 154 to 165 of the principal Act” substitute “the

relevant provisions, that is to say, Chapters 4 to 10 of Part 3 and sections 222

and 223 of ITEPA 2003”.

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          (5)      In subsection (9)(a) for “the relevant sections” substitute “the relevant

provisions”.

          (6)      In subsection (11)—

              (a)             for “the relevant sections”, in each place, substitute “the relevant

provisions”; and

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              (b)             in paragraph (a)(ii) for “section 141(3), 142(2), 145(3) or 156(8) of the

principal Act” substitute “section 328(1), 362, 363, 364 or 365 of

ITEPA 2003”.

          (7)      In subsection (13)—

              (a)             in the definition of “employee”, for “whose emoluments fall to be

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assessed under Schedule E” substitute “whose earnings are within

the charge to tax under ITEPA 2003”; and

              (b)             for the definition of “the relevant sections” substitute—

                                      ““the relevant provisions” has the meaning given by section

(8)(a) above.”

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  127      For section 16A substitute—

       “16A  Agency workers

              (1)             This section applies where—

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    494

 

                    (a)                   any services which an individual provides or is obliged to

provide under an agency contract are treated under section

44(2) of ITEPA 2003 as the duties of an office or employment

held by him with the agency, or

                    (b)                   any remuneration receivable under or in consequence of

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arrangements falling within section 45 of that Act is treated as

earnings from an office or employment held by an individual

with the agency.

              (2)             Where this section applies—

                    (a)                   section 15 above shall apply as if the individual were

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employed by the agency, and

                    (b)                   section 16 above shall not apply to any payments made to the

individual under or in consequence of the agency contract or

the arrangements.

              (3)             In this section “agency contract” and “remuneration” have the same

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meaning as in Chapter 7 of Part 2 of ITEPA 2003.”

  128      In section 42(3) (procedure for making claims etc.) for “section 203 of the

principal Act” substitute “PAYE regulations”.

  129      In section 46B(5) (questions as to the application of provisions concerning

the territorial sea to be determined by Special Commissioners) at the end of

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paragraph (b) insert—

                                          “, or

                    (c)                      section 41 of ITEPA 2003,”.

  130      In section 59A (payments on account of income tax)—

              (a)             in subsection (8)(b) for “section 203 of the principal Act” substitute

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“PAYE regulations”; and

              (b)             in subsection (10) for “Regulations under section 203 of the principal

Act (PAYE)” substitute “PAYE regulations”.

  131     (1)      Amend section 59B (payment of income tax and capital gains tax) as follows.

          (2)      In subsection (1) for “, 547(5) or 599A(5) of the principal Act” substitute “or

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547(5) of the principal Act or section 626 of ITEPA 2003”.

          (3)      In subsection (2)(a) for “section 203 of the principal Act” substitute “PAYE

regulations”.

          (4)      In subsection (8) for “Regulations under section 203 of the principal Act

(PAYE)” substitute “PAYE regulations”.

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  132      In section 62(1A)(a) (priority of claim for tax)—

              (a)             for “emoluments” substitute “taxable earnings (as defined by section

10 of ITEPA 2003)”;

              (b)             for “section 203 of the principal Act (pay as you earn)” substitute

“PAYE regulations”.

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  133      In section 63(3)(a) (recovery of tax in Scotland) for “section 203 of the

principal Act (pay as you earn)” substitute “PAYE regulations”.

  134      In section 64(1A)(a) (priority of claim for tax in Scotland)—

              (a)             for “emoluments” substitute “taxable earnings (as defined by section

10 of ITEPA 2003)”;

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Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    495

 

              (b)             for “section 203 of the principal Act (pay as you earn)” substitute

“PAYE regulations”.

  135     (1)      Amend section 70 (evidence) as follows.

          (2)      In subsection (2)(a) for “or the principal Act” substitute “, the principal Act

or ITEPA 2003”.

5

          (3)      In subsection (4) for “emoluments” in both places where it occurs substitute

“earnings or amounts treated as earnings”.

          (4)      After subsection (4) insert—

              “(5)                In subsection (4) “earnings or amounts treated as earnings” means

earnings or amounts treated as earnings which constitute

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employment income (see section 7(2)(a) or (b) of ITEPA 2003).”

  136      In section 91(3)(c) (effect on interest of reliefs) for “section 203 of the

principal Act” substitute “PAYE regulations”.

  137     (1)      Amend the Table in section 98 (special returns, etc.) as follows.

          (2)      Omit from the first column of the Table the entries relating to—

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              (a)             regulations under section 202 of ICTA;

              (b)             paragraph 117 of Schedule 8 to the Finance Act 2000;

              (c)             paragraph 64 of Schedule 14 to the Finance Act 2000.

          (3)      At the end of the first column of the Table insert the following entries—

 

“Regulations under

  

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section 589 of ITEPA 2003.

  
 

Regulations under section

  
 

715 of ITEPA 2003.

  
 

Paragraph 93 of Schedule

  
 

2 to ITEPA 2003.

  

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Paragraph 45 of Schedule

  
 

3 to ITEPA 2003.

  
 

Paragraph 33 of Schedule

  
 

4 to ITEPA 2003.

  
 

Paragraph 51 of Schedule

  

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5 to ITEPA 2003.”

  

          (4)      Omit from the second column of the Table the entries relating to—

              (a)             section 136(6) of ICTA;

              (b)             section 140G of ICTA;

              (c)             regulations under section 202 of ICTA;

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              (d)             regulations under section 203 of ICTA;

              (e)             section 313(5) of ICTA;

              (f)             section 85(1) and (2) of the Finance Act 1988;

              (g)             paragraph 65 of Schedule 14 to the Finance Act 2000.

          (5)      At the end of the second column of the Table insert the following entries—

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Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    496

 
  

“Sections 432 and 433 of

 
  

ITEPA 2003.

 
  

Section 445 of ITEPA 2003.

 
  

Sections 465 and 466 of

 
  

ITEPA 2003.

 

5

  

Section 486 of ITEPA 2003

 
  

Regulations under section

 
  

589 of ITEPA 2003.

 
  

Regulations under section

 
  

715 of ITEPA 2003.

 

10

  

PAYE regulations.

 
  

Paragraph 52 of Schedule 5

 
  

to ITEPA 2003.”

 

  138      In section 98A(1) (special penalties in the case of certain returns) for

“Regulations under section 203(2) (PAYE) or” substitute “PAYE regulations

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or regulations under section”.

  139      In section 118 (interpretation) after the entry relating to “inspector” insert—

                    ““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act

2003,”.

  140      In section 119(4) (construction of the Act) after “1992 Act” insert “and ITEPA

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2003”.

  141      In paragraph 4(1A) of Schedule 1A (claims etc. not included in returns) for

“section 203 of the principal Act” substitute “PAYE regulations”.

  142      In paragraph 3 of Schedule 3 (rules for assigning proceedings to General

Commissioners) for “regulations under section 203 of the principal Act”

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substitute “PAYE regulations”.

  143      In Schedule 3A (electronic lodgement of tax returns etc.) in paragraph 2(4)

(returns to which the Schedule applies) after “the principal Act” insert “or

under ITEPA 2003”.

Finance Act 1973 (c. 51)

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  144      Schedule 15 to the Finance Act 1973 (territorial extension of charge to tax —

supplementary provisions) is amended as follows.

  145      In paragraph 2(b) for “emoluments” substitute “earnings or amounts treated

as earnings which constitute employment income (see section 7(2)(a) or (b)

of the Income Tax (Earnings and Pensions) Act 2003)”.

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  146      In paragraph 5 for “Schedule E” substitute “the Income Tax (Earnings and

Pensions) Act 2003”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    497

 

Finance Act 1974 (c. 30)

  147      In section 24 of the Finance Act 1974 (returns of persons treated as

employees) for “any emoluments paid to him, whether or not tax is

chargeable on them” substitute “any general earnings paid to him”.

Interpretation Act 1978 (c. 30)

5

  148      In Schedule 1 to the Interpretation Act 1978 (words and expressions defined)

after the definition of “Parliamentary election” insert—

                    ““PAYE income” has the meaning given by section 683 of the Income

Tax (Earnings and Pensions) Act 2003.”

                    “PAYE regulations” means regulations under section 684 of that Act.”

10

Education (Scotland) Act 1980 (c. 44)

  149      In section 73B of the Education (Scotland) Act 1980 (grants and loans:

Scotland)—

              (a)             in subsection (3)(g) for “regulations under section 203 of the Income

and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE

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regulations”; and

              (b)             in subsection (4) for “income assessable to income tax under

Schedule E” substitute “PAYE income”.

Inheritance Tax Act 1984 (c. 51)

  150      The Inheritance Tax Act 1984 is amended as follows.

20

  151     (1)      Amend the following provisions as provided in sub-paragraph (2)—

              (a)             section 13(4)(c) (dispositions by close companies for benefit of

employees),

              (b)             section 72(4A) (property leaving employee trusts and newspaper

trusts), and

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              (c)             section 86(3)(c) (trusts for benefit of employees).

          (2)      In each of those provisions, for “an employee share ownership plan

approved under Schedule 8 to the Finance Act 2000” substitute “a share

incentive plan approved under Schedule 2 to the Income Tax (Earnings and

Pensions) Act 2003”.

30

  152      In section 14(1) (waiver of remuneration), for “would be assessable to

income tax under Schedule E” substitute “would be earnings, or would be

treated as earnings, and would constitute employment income (see section

7(2)(a) or (b) of the Income Tax (Earnings and Pensions) Act 2003)”.

Bankruptcy (Scotland) Act 1985 (c. 66)

35

  153      In paragraph 1(1) of Schedule 3 to the Bankruptcy (Scotland) Act 1985

(preferred debts) for “section 203 of the Income and Corporation Taxes Act

1988 (pay as you earn)” substitute “PAYE regulations”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    498

 

Insolvency Act 1986 (c. 45)

  154      In paragraph 1 of Schedule 6 to the Insolvency Act 1986 (the categories of

preferential debts)—

              (a)             for “emoluments” substitute “taxable earnings (as defined by section

10 of the Income Tax (Earnings and Pensions) Act 2003)”; and

5

              (b)             for “section 203 of the Income and Corporation Taxes Act 1988 (pay

as you earn)” substitute “PAYE regulations”.

Finance Act 1988 (c. 39)

  155     (1)      Section 73 of the Finance Act 1988 (consideration for certain restrictive

undertakings) is amended as follows.

10

          (2)      In subsection (2) for “any sum to which section 313 of that Act applies”

substitute “any payment which is treated as earnings of an employee by

virtue of section 225 of the Income Tax (Earnings and Pensions) Act 2003

(payments for restrictive undertakings)”.

          (3)      In subsection (3) for “Any sum to which section 313 of the Taxes Act 1988

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applies” substitute “Any payment which is treated as earnings of an

employee by virtue of section 225 of the Income Tax (Earnings and Pensions)

Act 2003”.

Finance Act 1989 (c. 26)

  156      The Finance Act 1989 is amended as follows.

20

  157      For section 43 substitute—

       “43 Schedule D: computation

              (1)             In calculating profits or gains of a trade to be charged under

Schedule D for a period of account, no deduction is allowed for an

amount charged in the accounts in respect of employees’

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remuneration, unless the remuneration is paid before the end of the

period of 9 months immediately following the end of the period of

account.

              (2)             For the purposes of subsection (1) above an amount charged in the

accounts in respect of employees’ remuneration includes an

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amount—

                    (a)                   for which provision is made in the accounts, or

                    (b)                   which is held by an intermediary,

                              with a view to its becoming employees’ remuneration.

              (3)             Subsection (1) above applies whether the amount is in respect of

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particular employments or in respect of employments generally.

              (4)             If the remuneration is paid after the end of the period of 9 months

mentioned in subsection (1) above, any deduction allowed in respect

of it is allowed for the period of account in which it is paid and not

for any other period of account.

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              (5)             If the profits of the trade are calculated before the end of the period

of 9 months mentioned in subsection (1) above—

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    499

 

                    (a)                   it must be assumed, in making the calculation, that any

remuneration which is unpaid when the calculation is made

will not be paid before the end of that period, but

                    (b)                   if the remuneration is subsequently paid before the end of

that period, the calculation is adjusted if a claim to adjust it is

5

made to an officer of the Board within 2 years beginning with

the end of the period of account.

              (6)             For the purposes of this section, remuneration is paid when it—

                    (a)                   is treated as received by an employee for the purposes of the

Income Tax (Earnings and Pensions) Act 2003 by section 18,

10

19, 31 or 32 of that Act (receipt of money and non-money

earnings), or

                    (b)                   would be so treated if it were not exempt income.

              (7)             In this section—

                                      “employee” includes an office-holder and “employment”

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correspondingly includes an office, and

                                      “remuneration” means an amount which is or is treated as

earnings for the purposes of the Income Tax (Earnings and

Pensions) Act 2003.”

  158      For section 44 substitute—

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       “44 Investment and insurance companies: computation

              (1)             In calculating the profits of an investment company for a period of

account, no deduction is allowed for an amount charged in the

accounts in respect of employees’ remuneration, unless the

remuneration is paid before the end of the period of 9 months

25

immediately following the end of the period of account.

              (2)             For the purposes of subsection (1) above an amount charged in the

accounts in respect of employees’ remuneration includes an

amount—

                    (a)                   for which provision is made in the accounts, or

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                    (b)                   which is held by an intermediary,

                              with a view to its becoming employees’ remuneration.

              (3)             Subsection (1) above applies whether the amount is in respect of

particular employments or in respect of employments generally.

              (4)             If the remuneration is paid after the end of the period of 9 months

35

mentioned in subsection (1) above, any deduction allowed in respect

of it is allowed for the period of account in which it is paid and not

for any other period of account.

              (5)             If the profits of the trade are calculated before the end of the period

of 9 months mentioned in subsection (1) above—

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                    (a)                   it must be assumed, in making the calculation, that any

remuneration which is unpaid when the calculation is made

will not be paid before the end of that period, but

                    (b)                   if the remuneration is subsequently paid before the end of

that period, the calculation is adjusted if a claim to adjust it is

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made to an officer of the Board by or on behalf of the

 

 

 
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