Tue, 1 Sep 2009

HMRC electronic P60 campaign a success

HMRC has amended PAYE regulations to allow employers the right to issue electronic P60s from 6 April.

The Institute of Payroll Professionals (IPP) has lobbied on the issue for several years and published a survey last year showing that 90% of its members were in favour of digital P60s.

The IPP’s associate director of policy, research and strategic visibility, Karen Thomson, said: ‘This is a fantastic example of where, with statistical evidence, HMRC has shown it wants to work with employers to help reduce their payroll burdens.’

She said one of the main advantages of ‘eP60s’ is the time and cost saved if employees request a duplicate form.

Ms Thomson added: ‘In addition, eP60s could offer a quicker and safer method of distribution, as well as alleviate the risk of identity fraud.’

Almost all employers are already required to submit P35s and P14s online, and from April 2011 all employers will also be required to submit P45s and P46s electronically.

VocaLink claims PAYE will improve with new system

The company charged with implementing the Conservative party’s plans to centralise the PAYE process has hit back at opposition by payrollers, saying HMRC, employers and taxpayers will ‘benefit largely’ from the new system.

VocaLink’s head of government and public sector, Peter Seymour, said: ‘The new system will remove a lot of complexity… not least it will remove the need for tax codes.

’For employers it will also remove a lot of red tape and reduce overheads, particularly as more processing has been put on them over the last couple of years. For taxpayers it will provide a more accurate system, particularly those with more than one source of income, such as the over 65s.’

He added that the cost savings from the new system ‘will be made in different areas, centrally within HMRC and within the employers’.

Responding to accusations that the new system would add a layer of extra cost, Mr Seymour said it was ‘not the intention’. He added: ‘The intention is to take away cost and improve accuracy, particularly in those cases where people have multiple sources of employment, which the current system doesn’t handle quite so well.’

He explained: ‘We are just the technology adviser. All we can put across is how the technology is supported. It’s down to HMRC to consult on the proposals put forward.’

Call for electronic P60s

The Institute of Payroll Professionals is lobbying HM Revenue & Customs to allow employers to issue P60s to employees electronically.

The move by the IPP follows a survey of its members, in which 90% of respondents voted in favour of a change in legislation to allow P60s to be sent out in an electronic format. Fewer than 10% of respondents did not want change to the legislation.

Karen Thomson, associate director of policy, research and strategic visibility at the IPP, said: ‘As many of the returns that payroll must submit to HMRC are already electronic, including P14s, there is no reason why P60s should not be issued in the same way. A lot of employers already use online facilities for things such as e-payslips, so expanding this to P60s makes a lot of sense,’ Ms Thomson added.

Some of the benefits of permitting electronic P60s – as highlighted by respondents to the survey – include saved time in printing and posting P60s; ensuring employees receive P60s by the deadline; time saved providing employees with duplicate copies; reduced costs for employers; and improvements in security.

Transmission of electronic P14s and P35s is compulsory for all employers from the end of this tax year, while electronic in-year forms such as P45s become compulsory from April 2011.