(This note is not part of the Regulations)
These Regulations insert a new Chapter 4 into Part 4 of the Income Tax (Pay as You Earn) Regulations 2003 (the PAYE Regulations). The new Chapter, consisting of regulations 97A to 97L, deals with debts of managed service companies.
Regulation 97A consists of interpretative provisions, and regulation 97B sets out the circumstances in which a managed service company has a “relevant PAYE debt”.
Regulation 97C applies if a managed service company has a relevant PAYE debt, and an officer of Revenue and Customs is of the opinion that the relevant PAYE debt or a part of the relevant PAYE debt (the “specified amount”) is irrecoverable from the managed service company within a reasonable period. In these circumstances HM Revenue and Customs may make a direction authorising the recovery of the specified amount from the persons specified in section 688A(2) of the Income Tax (Earnings and Pensions) Act 2003. Before making a direction, HM Revenue and Customs must serve a notice (a “transfer notice”) on the person in question (“the transferee”).
Regulation 97D specifies the time limits within which the transfer notice must be served; and regulation 97E specifies the contents of a transfer notice. Regulation 97F contains provisions relating to the payment of the specified amount.
Regulation 97G deals with appeals, and regulation 97H with procedure on an appeal.
Regulation 97J deals with the withdrawal of transfer notices, regulation 97K with the application of Part 6 of the Taxes Management Act 1970 (c. 9), and regulation 97L with the repayment of surplus amounts.
A full regulatory impact assessment of the effect that the provisions in the Finance Act 2007 relating to managed service companies will have on the costs of business and the voluntary sector is published on HM Revenue and Customs’s website at www.hmrc.gov.uk/ria/full-ria-man-serv-coys.pdf, and is annexed to the Explanatory Memorandum which is available alongside the instrument on the OPSI website.