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GLOSSARY

Pay as you earn (PAYE) definition

Published by a LexisNexis Private Client expert

What does Pay as you earn (PAYE) mean?

The system by which an employer or pension provider makes certain statutory deductions from an employee's or pensioner's income and remits them to HMRC.

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Time limits for filing returns and paying tax—table

Time limits for filing returns and paying tax—table FORTHCOMING CHANGE related to Making Tax Digital: As part of the government’s wider Making Tax Digital (MTD) programme: • subject to limited exceptions and deferrals, sole traders and landlords will be required to submit quarterly digital updates to HMRC about their income and outgoings and returns in digital compatible formats with effect from April 2026, April 2027 or April 2028 for those with income in excess of £50,000, £30,000 or £20,000 respectively, and • the previous government consulted from 12 November 2020 to 5 March 2021 on the design for extending MTD to corporation tax on a voluntary basis from 2024 and a mandatory basis not before 2026, for more detail see News Analysis: Further provisions for draft Finance Bill 2021—Tax analysis—Business and enterprise The 2020 10 year roadmap for digitalising tax administration is explained in more detail in News Analysis: Making tax digital—getting on the virtual road. MTD for VAT has applied to all VAT-registered businesses, regardless of...

IR35—the large and public client off-payroll regime—private sector checklist

IR35—the large and public client off-payroll regime—private sector checklist Under the large and public client off-payroll regime, medium and large private sector businesses with a UK connection are responsible for: • assessing whether IR35 applies to an engagement with an off-payroll worker, and • in certain circumstances as described further below, operating Pay As You Earn (PAYE) and accounting for employer National Insurance contributions (NICs) on payments made to off-payroll workers For more on the IR35 rules generally, see Practice Note: IR35—introduction, developments and key difficulties. For more on the large and public client off-payroll regime, see Practice Note: IR35—the large and public client off-payroll regime. For guidance on the practical issues facing the end client and, if different, the fee payer, when an arrangement falls within the large and public client off-payroll regime, see Practice Notes: IR35—the large and public client off–payroll regime—practical considerations for the end client and IR35—the large and public client off–payroll regime—practical considerations for the fee-payer respectively. This Checklist considers the issues that a private...

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Unwinding an asset sale mid-completion—key tax considerations

Unwinding an asset sale mid-completion—key tax considerations An environment of economic uncertainty (eg as a result of high inflation and/or economic instability, including the repercussions of the coronavirus (COVID-19) pandemic and Brexit) often leads to cost cutting, not just in the form of releasing obligations under contracts and settling legal disputes, but also buyers trying to extricate themselves from transactions, for instance where a business or asset acquisition that looked attractive to a buyer a couple of years or months ago is suddenly much less appealing. But unwinding an acquisition is not straightforward, and it can lead to unintended tax consequences if not carefully managed. This Practice Note discusses some of the tax issues that may arise if a business or asset sale is unwound after it has been signed and some of the assets and liabilities have been transferred. This Practice Note assumes that the buyer and seller are not connected and are both UK tax resident and large corporate entities. For information on the tax considerations relevant to...

Pre-entry planning

Pre-entry planning A person who is planning to come to the UK should consider the possible tax consequences before they arrive , so as to maximise the chances of reducing or eliminating any UK tax. For information on why certain pre-entry planning is necessary, see the Introductory guide to residence and domicile for UK tax purposes before 6 April 2025 [ARCHIVED], Residence after 5 April 2013 and Domicile Practice Notes. For information on the taxation of employment income in the UK, see Taxation of earnings and benefits—overview and Practice Note: UK resident non-domiciliaries—earnings. The extent to which planning is necessary will vary from one individual to another, depending on circumstances: the person who is here for a short-term project, leaving their family in his home country, will have different issues to consider than the person who comes seeking permanent employment, for long-term study, or to get married. Individual advice may thus be necessary and this Practice Note is only a guide. Note in particular that it does not cover...

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Records retention schedule (employment)

Records retention schedule (employment) Introduction This Record retention schedule accompanies and is incorporated into [insert organisation’s name]’s Record management policy. It sets out the time periods that different types of (employment-related) business records must be retained for business and legal purposes. This is a relatively lengthy document listing the many types of employment-related records used by [insert organisation’s name] and the applicable retention periods for each record type. The retention periods are based on business needs and legal requirements. If you maintain any types of records that are not listed in this Schedule, and it is not clear from the existing record types in this Schedule what retention period should apply, please contact [the data protection officer OR [insert job title or department]] for guidance. Any deviation from the retention periods in this Schedule must be approved in advance by [insert, eg a company lawyer]. 1 Employment records 1.1 Personnel records Record Recommended retention period Storage format Reference Rejected job applicant records, including:• contact details •...

IR35—the large and public client off-payroll regime—status determination statement (SDS)

IR35—the large and public client off-payroll regime—status determination statement (SDS) [To be set out on client’s headed notepaper or with client’s logo] Status determination statement This is a status determination statement, provided in accordance with the requirements of section 61NA of the Income Tax (Earnings and Pensions) Act 2003, in relation to the off-payroll rules. The off-payroll rules can apply if a worker (sometimes known as a contractor) provides their services through their own limited company (usually known as a personal service company, or PSC), or another type of intermediary, to a client which is a public authority, or a large or medium private sector organisation with a UK connection. The rules apply if a worker provides their services to a client through an intermediary, but would be classed as an employee for tax purposes if they were contracted directly, and ensure that such workers pay broadly the same tax and National Insurance contributions (NICs) as employees. These rules are known as the ‘large and public client...

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