Income Tax Act 2007 section 916

Duty of payee to notify if payment not exempt

Section 916 requires a payee to notify HMRC and the paying company when a condition for exemption from tax on a payment is no longer satisfied.

• Where a payment has been treated as exempt under section 758 of ITTOIA, the payee has an ongoing obligation to monitor whether the conditions for that exemption continue to be met.
• If the payee becomes aware that any condition for exemption is no longer fulfilled, it must notify both an officer of Revenue and Customs and the company that made the payment.
• This duty ensures that HMRC and the paying company are promptly informed so that the correct tax treatment can be applied going forward.
• The notification requirement was updated by Finance Act 2021 section 34(1)(b), and the original reference to "the Board" (i.e. the Board of Inland Revenue) was modernised to refer to "an officer of Revenue and Customs."