IR18                                              29 November 1994
            QUARTERLY PAYMENTS FOR SMALL EMPLOYERS

The Chancellor proposes in his Budget to raise by pounds 150 a month the
level below which deductions under Pay As You Earn (PAYE) and  
National Insurance Contributions (NIC) can be paid to the Inland  
Revenue quarterly rather than monthly.  For deductions made in 
periods beginning after 5 April 1995 employers will be able  to  pay 
quarterly if their average monthly payments are less than pounds 600. The
present limit is pounds 450 a month.

The  Chancellor's  intention is to give an additional  100,000 
employers  the opportunity to benefit from improved cash  flow and  
reduced administrative costs.  This will bring the  total number of 
employers who could benefit to 750,000 - over 60 per cent of all 
employers.

The  change will also apply to payments by contractors in  the 
construction industry.

                            DETAILS

1.   At  present, employers whose average monthly payments  to the 
Inland Revenue of PAYE and NIC are less than pounds 450  in total  can  
choose to pay quarterly rather than  monthly.  This  limit will be 
increased to pounds 600 for deductions made in  periods  beginning after 5 
April 1995.  Payments  are required  for  the quarters ended 5 July, 
5  October,  5 January and 5 April and are due within 14 days of the 
end of each quarter (by the 19th of these months).

2.   Contractors in the construction industry can also  choose to  
pay  quarterly  provided that their  average  monthly payments  of  
PAYE, NIC and deductions from  payments  to subcontractors are less 
than the same limit.

3.   The  change  does not require legislation in the  Finance Bill. 
It will be made in the regulations for PAYE,  NIC and  deductions  
from payments to subcontractors  in  the construction industry.

                       NOTES FOR EDITORS

1.   The  Chancellor introduced quarterly payments  for  small 
employers  in  his 1991 Budget (see Inland Revenue  Press Release  of
19 March 1991 "Quarterly Payments  for  Small Employers").

2.   The  regulations to allow small employers and contractors to  
make payments quarterly rather than monthly were laid on  26 April 
1991 (see Inland Revenue Press Release of 26 April  1991  "Quarterly 
Payments for Small Employers  and Contractors").   They  are  
entitled  "The   Income   Tax (Employments) (No. 21) Regulations 
1991" SI No. 1080  and "The  Income  Tax  (Subcontractors  in  the  
Construction Industry) (Amendment) Regulations 1991" SI No. 1081.  
The corresponding  NIC regulations are entitled  "The  Social 
Security  (Contributions) Amendment (No.  4)  Regulations 1991" SI 
No. 1632.

3.   The proposed changes will not affect the entitlements  of 
employees to National Insurance benefits.

4. The estimated cost of this measure is pounds 75 million in the tax 
year 1995-96.