Revenue Note for Guidance

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Revenue Note for Guidance

531D Deduction and payment of income levy on relevant emoluments.

Summary

This section details the deduction and payment obligations of an employer in relation to the operation of the income levy.

Details

(1) Subsection (1) places the primary obligation on an employer to operate the levy;

(2) Subsection (2) detailing the structure of the payroll bands of levy deduction. This is set out over 2 paragraphs –

(2)(a) Subparagraph (a) details the rates of payroll deduction as they applied for the period from 1 January 2009 to 30 April 2009 i.e. 1%, 2% and 3%, together with the appropriate weekly threshold which applied at each rate.

(2)(b) Subparagraph (b) details the new higher rates of payroll deduction that apply from 1 May 2009 to 31 December 2009 i.e. 2%, 4% and 6%, together with the appropriate weekly threshold to apply at each rate.

The levy applies irrespective of whether the relevant emoluments refer in whole or in part to the current or some other year of assessment.

(3) Subsection (3) applies the rule of operation of PAYE to operation of the levy. In general the provisions of Part 4 of the PAYE Regulations will apply and an employer may only deduct income levy in accordance with the Regulations.

(4)(a)(i) An employer must remit income levy within 14 days from the end of the month in which it is deducted.

(4)(a)(ii) The Collector-General may authorise an employer to remit income levy in respect of longer periods than one month subject to the period not exceeding one year.

(4)(a)(iii) A period of 23 days from end of month may be authorised by the Collector-General if income levy is remitted electronically. However, if the employer fails to make the payment electronically within the 23 days the lower time limit of 14 days is then applied.

(4)(b) Subsection (4)(b) provides for the Collector-General to issue a receipt for each instalment of income levy remitted, or alternately one receipt for all payments made in the specified period.

(5)(a) Subsection (5)(a) sets out the time limits that apply in respect of the making returns of income levy details to the Collector-General by employers who are ceasing to be employers;

(5)(b) Subsection (5)(b) requires that returns made by a body corporate are signed by the secretary or director of the body;

(6)(a) Subsection (6)(a) outlines the Revenue requirements in relation to returns and documents to be given to employees on the operation of the levy. In particular the employer is required to provide each employee after the end of the year with a certificate showing details of –

  • The total amount of the levy deducted;
  • Dates of commencement of the employee;
  • The rate of levy payable by each employee; and
  • The amount of relevant emoluments;

(6)(b) Subsection (6)(b) sets out the administrative requirements for documentation that must be supplied to employees who cease employment during the year. These are-

  • The total amount of the levy deducted on behalf of the employee;
  • Dates of commencement and cessation;
  • The rate of levy payable by the employee; and
  • The amount of relevant emoluments.

Relevant Date: Finance Act 2019