Income Tax (Earnings and Pensions) Act 2003 section 222

Payments by employer on account of tax where deduction not possible

Section 222 deals with situations where an employer is treated as having made a "notional payment" of income to an employee — typically where remuneration is provided in a non-cash form such as a readily convertible asset — and the employer cannot deduct PAYE tax directly from that payment, so must account for the tax separately. If the employee does not reimburse the employer for that tax, the unreimbursed amount becomes an additional taxable earnings charge on the employee.