Thu, 4 Nov 2010

Nine out of ten say no to PAYE change

Around 90% of submissions to HM Revenue & Customs on centralising and automating the PAYE system are negative, Phil Nilson of the Revenue’s Employer Programme told the autumn Payroll World conference last month. He indicated that much of the concern came from larger organisations. ‘The smaller company may think that this would remove a burden.’ He stressed that ‘this is a discussion document, not a consultation – it’s not a done deal.’

The planned move to Centralised Deductions – in which the gross-to-net calculations would be moved from the employer to a central HMRC-run service – would be the biggest upheaval of the PAYE system since it was introduced in 1944. Concerns have focused on the clarity of the division between the employer’s and Revenue’s responsibilities and the capability of the Revenue to handle such a major project.

The move becomes possible because of the switch from regional databases to a single database, with an individual citizen’s tax and NI records now accessible at a single source. Income tax is owed on the basis of all earnings, so the principal employer of someone with more than one job would not know that person’s annual income.

Earlier at the conference, Helen Hargreaves, delivering the text of David Ellis, head of the Employer Engagement & Customer Understanding department at the Revenue, acknowledged that the eightweek discussion period was ‘not ideal’.
She added: ‘It was driven by the spending review timetable.’