Commentary on Sections Omitted material Overview Section 710: Notional payments: accounting for tax
2883.This section sets out how an employer must account for tax on a “notional payment”. It derives from section 203J of ICTA.
2884.Subsection (1) (with the definition of relevant time in subsection (7)) requires the employer to deduct any tax due on a notional payment from actual payments made at the same time or later in the income tax period.
2885.Subsection (2) defines notional payment and extends references to employer in this section.
2886.Subsections (3) and (4) require the employer to account for tax which cannot be deducted from actual payments.
2887.Subsection (5) provides power for PAYE regulations to determine the time when any notional payment is made, to apply any provisions of the regulations to notional payments (with or without modifications), and to deal with matters about the collection and recovery of amounts accounted for in respect of notional payments.
2888.Subsection (6) provides for the employee to be treated as having paid the tax accounted for on a notional payment. It also provides when the employee is treated as having paid the tax: see Change 153 in Annex 1.
2889.Subsection (7) derives from regulations 7 and 8 of the Income Tax (Employments) (Notional Payments) Regulations, SI 1994 No 1212. It defines the relevant time for subsections (1) and (4).
2890.Subsection (8) derives from regulation 2 of the Income Tax (Employments) Regulations 1993, SI 1993 No 744. It provides that “income tax period” takes the same meaning as in the PAYE regulations. It is the tax month or (for some small employers) quarter.