Income Tax (Earnings and Pensions) Act 2003 section 709

Additional provision for certain assessments

Section 709 ensures that late income tax assessments on PAYE income are made in accordance with the tax practice that was generally accepted at the time, rather than reflecting any later changes in interpretation.

• The section applies where an income tax assessment on "relevant income" is made more than 12 months after the end of the tax year to which it relates
• Where the section applies, the assessment must follow the generally prevailing practice as it stood at the end of that 12-month period
• "Relevant income" is income that was accounted for through PAYE deductions or repayments and was received at least 12 months before the start of the tax year in which the assessment is raised
• The rule gives employees whose tax was settled through PAYE the same degree of finality as taxpayers who received formal assessments at the time