Statutory Instruments
2018 No. 1327
Income Tax
The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2018
Made
7th December 2018
Laid before the House of Commons
11th December 2018
Coming into force
1st January 2019
Citation, commencement and effect
1. —(1) These Regulations may be cited as the Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2018 and come into force on 1st January 2019.
(2) The amendments made by these Regulations have effect for the tax year 2019-20( 3 ) and subsequent tax years.
Amendment of the Income Tax (Pay As You Earn) Regulations 2003
2.The Income Tax (Pay As You Earn) Regulations 2003( 4 ) are amended as follows.
3. In regulation 2(1) (interpretation)—
(a) in the definition of “additional rate”( 5 ) after “ITA”( 6 ) insert “, except where the employee is a Welsh taxpayer where it means the Welsh additional rate of income tax calculated under section 6B of that Act”( 7 ),
(b) in the definition of “basic rate”, after “except where” insert “—”, and for the remainder of the definition commencing with “the employee”, substitute—
“ (a) the employee is a Scottish taxpayer where it means the Scottish basic rate of income tax set by a Scottish rate resolution of the Scottish Parliament under section 80C of the Scotland Act 1998, or
(b) the employee is a Welsh taxpayer where it means the Welsh basic rate of income tax calculated under section 6B of ITA ” ,
(c) in the definition of “higher rate” after “ITA” insert “, except where the employee is a Welsh taxpayer where it means the Welsh higher rate of income tax determined under section 6B of that Act”; and
(d) after the definition of “United Kingdom continental shelf” insert—
“ “Welsh rate” means a rate set by the National Assembly for Wales for the tax year under section 116D of the Government of Wales Act 2006 (income tax) ( 8 ) ;
“Welsh taxpayer” has the same meaning as in section 116E of the Government of Wales Act 2006 (Welsh taxpayers). ” .
4. In regulation 7 (meaning of “code” etc )( 9 ) after paragraph (2A) insert—
“ (2B) “C code” means a code which effects deductions of tax at the rates calculated under section 6B of ITA. ” .
5. In regulation 108 (calculation of tax payable under PSA)( 10 ) in paragraph 2(d)—
(a) at the end of paragraph (iv) insert “and”, and
(b) after paragraph (iv) insert—
“ (v) at any Welsh rate applicable for the tax year to which the computation relates; ” .
Justin Holliday
Melissa Tatton
Two of the Commissioners for Her Majesty’s Revenue and Customs
7th December 2018
2003 c. 1 . Section 684(1) was amended, so far as relevant, by section 145 of the Finance Act 2003 (c. 14) , paragraphs 102 and 117 of Schedule 4 to the Commissioners for Revenue and Customs Act 2005 (c. 11) , section 94 of the Finance Act 2006 (c. 25) and paragraphs 2 to 7 of Schedule 58 to the Finance Act 2009 (c. 10) .
Paragraph 102 of Schedule 4 to the Commissioners for Revenue and Customs Act 2005 (c. 11) amended section 684 of the Income Tax (Earnings and Pensions) Act 2003 so that the Commissioners for Her Majesty’s Revenue and Customs have the power to make the Regulations.
The tax year 2019-20 was appointed by article 6 of S.I. 2018/892 as the first tax year in relation to which a Welsh rate resolution may be made by the National Assembly for Wales under section 116D of the Government of Wales Act 2006 (c. 32) .
S.I. 2003/2682 (the “principal Regulations”); relevant amending instruments are S.I. 2006/243 , 2007/1077 , 2008/782 2011/729 and 2018/267 .
The definition of additional rate was inserted into the principal Regulations by regulation 3 of S.I. 2011/729 .
The term “ITA” and the definition of that term as the Income Tax Act 2007 (c. 3) was inserted into regulation 2 of the principal Regulations by regulation 3 of S.I. 2008/782 .
Section 6B was inserted into the Income Tax Act 2007 by section 9(3) of the Wales Act 2014 (c. 29) with effect in relation to the tax year 2019-20 and subsequent tax years by virtue of S.I. 2018/892 made under section 14(2) of that Act.
2006 c. 32 . Sections 116D and E were inserted into the Government of Wales Act 2006 by section 8(3) of the Wales Act 2014.
Paragraph 2A was inserted into regulation 7 of the principal Regulations by regulation 2(3) of S.I. 2017/414 .
Paragraph 2(d)(iv) was inserted into regulation 108 of the principal Regulations by regulation 9(c)(iii) of S.I. 2018/267 .