Tax Credits Act 2002 section 25

Payments of working tax credit by employers

Section 25 establishes the framework for regulations requiring employers to pay working tax credit to their employees through the payroll, alongside their normal wages.

• Regulations may require employers to pay working tax credit (or specified elements of it) to employees when making PAYE income payments
• HMRC directs employers via notices, funds the payments (through set-off against income tax, NICs or student loan deductions), and can recover any overfunding
• Where an employer fails to comply with the regulations or HMRC notices, HMRC may pay the working tax credit directly to the employee
• For these purposes, an "employee" is anyone receiving PAYE income and an "employer" is the person making that payment

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