Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

PAYE: special types of payment: employee’s requirement to make good PAYE: employer does not operate PAYE correctly

Section 222 ITEPA 2003

Section 222 ITEPA 2003 is concerned only with the tax that the employer is required to account for to HMRC in accordance with section 710(4) ITEPA 2003 (see EIM11950).  If section 222 applies, the amount that is chargeable to tax is employment income of the employee.

Regardless of whether the employer operates PAYE correctly or not, if the employer is required by virtue of section 710(4) ITEPA 2003 to account for an amount of income tax in respect of a notional payment, then section 222 ITEPA 2003 may apply. The amount that the employer is required to account for by virtue of section 710(4) remains the same whether or not the employer operated PAYE correctly. Irrespective of the employer’s actions, a section 222 charge will arise if the employee does not make good the relevant amount of income tax to the employer within the time allowed.

For a notional payment treated as made on a date after 5 April 2014, the time allowed is the period ending 90 days after the end of the tax year in which the relevant date falls.

For a notional payment treated as made on a date before 6 April 2014, the time allowed is the period ending 90 days after the relevant date.

In relation to section 222, “the relevant date” ordinarily means the date on which the employer is treated as making the notional payment (see EIM11970).