Ersm170400 - paye & nics - hmrc internal manual

ERSM170400 - PAYE & NICS REFUND OF PAYE BY EMPLOYEE TO EMPLOYER (SECTION 222) Where an employer is required to operate PAYE by virtue of sections 698 to 700 on employment-related

securities or options, the employer may not be able to deduct the full amount that he is required to pay over to HMRC. ITEPA03/S222 imposes a charge to income tax on the employee if the

employee does not, within 90 days of the end of the tax year in which the chargeable event occurs, make good to the employer any PAYE tax that the employer was unable to deduct. For example,

if the event occurs on 28 February, the employee has until 4 July to make good the full amount of PAYE to the employer. Prior to 6 April 2014 different rules applied. See EIM11950 and the

succeeding pages for further guidance. EMPLOYER DOES NOT OPERATE PAYE CORRECTLY If the employer fails to operate PAYE correctly, then you may need to consider taking action to address that

PAYE failure. Even if there is a failure by the employer to operate PAYE, the section 222 charge remains if the employee has not made good within 90 days of the end of the tax year in which

the chargeable event occurs.  Further guidance can be found at EIM11954 EMPLOYEE MAKES GOOD AFTER MORE THAN 90 DAYS If the employee makes good the relevant amount of income tax to the

employer after the time allowed, the section 222 charge remains. Print this page