S.I. No. 377/1978 - Income Tax (Employments) Regulations, 1978.

S.I. No. 377 of 1978.

INCOME TAX (EMPLOYMENTS) REGULATIONS, 1978.

The Revenue Commissioners, in exercise of the powers conferred upon them by section 127 of the Income Tax Act, 1967 (No. 6 of 1967), hereby make the following regulations:

1. (1) These Regulations may be cited as the Income Tax (Employments) Regulations, 1978.

(2) These Regulations shall come into operation on the 6th day of April, 1979.

2. The Income Tax (Employments) Regulations, 1960 ( S.I. No. 28 of 1960 ), are hereby amended—

( a ) in Regulation 25 (2)—

(i) by the substitution in subparagraph (a) of "from the day on which an employee referred to in the foregoing paragraph first holds an employment with the employer in a year" for "from the commencement of the period in respect of which .the first payment of the emoluments referred to in the foregoing paragraph is made",

(ii) by the substitution of "£17" for "£6" and of "£73" for "£26" in subparagraph (a), and

(iii) by the substitution of the following subparagraph for subparagraph (b):

"(b) If, within the aforesaid period of four weeks or one month, the employer has not received from the employee the certificate of tax-free allowances and from the Inspector the tax deduction card, he shall thereafter, until he receives a certificate of tax-free allowances from the employee and a tax deduction card from the Inspector, on making any payment of emoluments to the employee in any one of the periods specified in column (1) of the following Table, deduct tax at the rate specified in column (2) of that Table opposite the mention of the period in the said column (1), and keep records on an emergency card on the basis that the employee's tax-free allowances are nil:

TABLE

and

(iv) by the insertion of the following subparagraph after subparagraph (b)—

"(c) For the purposes of subparagraphs (a) and (b) of this paragraph—

(i) all employments which the employee holds with the employer in a year of assessment shall be deemed to be one employment, and

(ii) the said employment, notwithstanding that for a part or parts of the said year the employee does not hold an employment with the employer, shall be deemed to be held for a continuous period commencing on the day on which the employee first holds an employment with the employer in that year and ending on the day on which he last holds an employment with the employer in that year.",

( b ) in Regulation 35—

(i) by the substitution, as respects the year 1979-80 and subsequent years of assessment, for paragraph (1) of the following paragraph:

"(1) Within 25 days from the end of the year, or from the date on which the employer ceases permanently to be an employer to whom Regulation 8 (1) applies, whichever is the earlier, the employer shall send to the Collector—

( a ) in such form as the Revenue Commissioners may approve or prescribe, a return in respect of each employee showing the total amount of the emoluments paid by him to the employee during the year and the total net tax deducted from the emoluments,

( b ) any temporary tax deduction form, or such other document corresponding to a temporary tax deduction form as may be authorised by the Revenue Commissioners used by him during the year for an employee in respect of whom he has not received a tax deduction card,

( c ) any emergency card, or such other document corresponding to an emergency card as may be authorised by the Revenue Commissioners, used by him during the year for an employee in respect of whom he has not received a tax deduction card, and

( d ) a statement, declaration and certificate in the prescribed form showing the total net tax deducted or repaid by him in respect of every employee during the year.",

(ii) by the deletion, as respects the year 1979-80 and subsequent years of assessment, of paragraph (3), and

(iii) by the deletion of paragraph (4),

( c ) in Regulation 37, by the insertion of the following paragraph after paragraph (3)—

"(4) The documents and records specified in paragraph (1) of this Regulation, other than certificates of tax-free allowances and the temporary tax deduction forms, and emergency cards, and the documents corresponding to such forms and cards, referred to in Regulation 35, shall be retained by the employer for a period of six years after the end of the year to which they refer, or for such shorter period as the Revenue Commissioners may authorise by notice in writing to the employer.",

and

( d ) in Regulation 53, by the substitution of the following paragraph for paragraph (1):

"(1) If a casual employee does not on the occasion of any period of casual employment deliver his daily tax deduction card to his employer, the employer shall, on making any such payment of emoluments as is referred to in Regulation 8 to the employee, deduct tax at the standard rate and keep records on a daily emergency card on the basis that the amount of the employee's tax-free allowances is one pound a day, and at the end of the period of casual employment shall give the daily emergency card to the employee.",

and the said subparagraph (a) of Regulation 25 (2), as so amended, is set out in the Table to this Regulation.

TABLE

( a ) During the period of four weeks or, in the case of an employee paid monthly, one month, from the day on which an employee referred to in the foregoing paragraph first holds an employment with the employer in a year or until earlier a certificate of tax-free allowances is received from the employee and a tax deduction card is received from the Inspector, the employer, on making any payment of emoluments to the employee, shall deduct tax at the reduced rate and keep records on an emergency card on the basis that the amount of tax-free allowances is £17 a week or, if the employee is paid monthly, is £73 a month.

    GIVEN this 28th day of December, 1978.

M. K. O'CONNOR,

Revenue Commissioner.

EXPLANATORY NOTE.

Regulation 25 of the Income Tax (Employments) Regulations, 1960, provides the "emergency basis" upon which a new employee is taxed in the P.A.Y.E. system pending production of a certificate of tax-free allowances. He gets this certificate from the Inspector of Taxes when he makes a return of his income to the Inspector.

The purpose of the present Regulations is (i) to increase the provisional tax-free allowances to be granted in the first month of the new employment, and (ii) to counter evasion of tax which has been occurring through abuse of the "emergency basis". The Regulations provide for an increase in the provisional tax-free allowances from £6 per week to £17 per week, or, in the case of employees paid monthly, from £26 per month to £73 per month, and for deduction of tax at progressively increasing rates from 25% to 60% according to the length of time the employee delays in furnishing his certificate of tax-free allowances. The Regulations also provide that in the case of a casual employee who does not produce his tax deduction card the rate at which tax is deducted is to be increased from the reduced rate to the standard rate and the amount of his provisional allowance is increased from 50 pence per day to £1 per day.

The Regulations have effect as from 6 April, 1979.