Amendments are to be made to PAYE Regulations to enable HMRC to calculate the amount of tax due where workers whose employment status has been re-categorised have made self-assessed payments. The amendments provide HMRC with an option when it issues a notice to the employee of whether to include details of the amounts offset and the tax years they refer to, or merely state the employment to which the notice applies. The relevant Draft Statutory Instrument making amendments to the Income Tax (PAYE) Regulations 2003 was published for external comment.

The legislation is being introduced because of an increase in the number of cases involving large employers where large numbers of workers’ employment status have been re-categorised by HMRC from self-employed to employed. Where the number of individuals concerned is substantial, the approach required by the current PAYE Regulations to issue a detailed direction notice to all employees imposes substantial administrative burdens on employers and HMRC.

The amendments to the legislation came into effect from 6 April 2014.