Income Tax (Earnings and Pensions) Act 2003 section 685

Tax tables

Section 685 requires HMRC to construct tax tables for the PAYE system, designed to spread income tax deductions evenly across the tax year so that the correct amount of tax is collected by the year end.

• HMRC must build tax tables that aim to collect the full year's income tax and any relevant debts through deductions from PAYE income paid during the same tax year
• The tables are designed so that tax is deducted proportionally throughout the year — for example, after three months roughly a quarter of the estimated annual tax should have been collected
• When estimating the annual tax due, HMRC takes into account allowances, reliefs and any adjustments required under specific PAYE regulations, and may assume that the pattern of pay received so far in the year will continue at the same rate
• Where it is impracticable for a payer to use the standard tax tables, PAYE regulations allow for alternative deduction arrangements agreed with HMRC, or for the employee to keep records and make payments as if they were the employer