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

HMRC internal manual

National Insurance Manual

Tax law rewrite: implications for the NIM

NIM00005 explains that the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) was developed by the Tax Law Rewrite (TLR) Project to replace the Schedule E legislation within the Income and Corporation Taxes Act 1988 (ICTA 1988). It also explains the effect of ITEPA 2003 and the new PAYE regulations on existing NICs legislation. The re-writing of tax law has implications for both tax and NICs guidance.

TLRW and tax guidance

While the aim of the TLR project is to rewrite tax law using simpler language and a clearer structure, ITEPA’s use of more contemporary English and its restructuring of the charge to tax under Schedule E required the introduction of wholly new guidance. The Employment Income Manual (EIM) is the guide to ITEPA 2003 and it describes tax law as it applies to the 2003 to 2004 and later tax years.

The existing Schedule E manual (SE) has been retained so as to describe tax law contained within ICTA 1988 which applied to the 2002 to 2003 and earlier tax years.

TLRW and NICs guidance

Since the effect of the TLR project on NICs legislation is largely consequential and has not changed any of the underlying principles, an alternative to the NIM has not proved necessary.

Instead, the NIM has been updated to reflect the changes to tax legislation brought about by ITEPA 2003 and the new PAYE regulations. The changes fall into one of three categories:

  • the removal of Schedule E terminology.

    NIM guidance has been undated to reflect the more modern language of ITEPA. Examples include the substitution of the words “taxable emolument” with that of “general earnings”.

  • Updating cross references

    Where existing NIM guidance included a reference to either an ICTA 1988 provision or included a cross reference to the Schedule E manual these have been replaced with equivalent ITEPA 2003 or EIM references. Existing ICTA 1988 and SE cross-references have been retained alongside the new references in order to assist staff when dealing with pre 2003 to 2004 cases.

  • New guidance

    Where the TLR changes involve more than a simple substitution the NIM guidance has been amended to reflect the change.