Grossing up the tax allowance
Where the employer bears the employee’s income tax, that tax payment itself increases taxable remuneration. The examples first calculate notional tax without the allowance, then gross up and check the final liability including the allowance. They cover one employer, two employers, partial bearing and changes in marginal tax band. A simple percentage formula works only within the relevant assumptions; crossing a band requires the more detailed computation illustrated.
Year-specific rates and rebates
The cases use YA 2016 and YA 2017 rates, relief assumptions and the stated YA 2017 rebate. They explain the gross-up mechanism and allocation between employers, including adjustments after earlier clearance, but those historical rates and rebates are not current-year entitlements. Apply the employee’s actual tax-bearing agreement, relevant YA rates and reliefs when reproducing the method. Ordinary payroll withholding is distinct from an employer agreeing to bear the tax.
Official source
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