Corporation Tax Act 2009 section 1112D

Total PAYE and NIC liabilities

Section 1112D defines how to calculate a company's total PAYE and national insurance contribution liabilities for a payment period, for the purposes of the R&D relief PAYE/NIC cap.

• Total PAYE and NIC liabilities for a payment period equal the sum of two amounts: income tax accounted for under PAYE (Amount A) plus Class 1 national insurance contributions (Amount B).
• When calculating Amount A, any deductions the company makes for child tax credit or working tax credit must be ignored — the gross PAYE figure is used.
• When calculating Amount B, any deductions for statutory maternity, adoption, paternity, shared parental or parental bereavement pay, as well as child tax credit and working tax credit, must also be ignored — again, the gross NIC figure is used.
• Where the payment period being assessed falls within but is shorter than another connected company's payment period, that other company's total is proportionately reduced to match the shorter period.