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Tories promise pilots for controversial plan
David Gauke MP, Shadow Treasury Minister, has promised full consultation and piloting of controversial plans to take PAYE calculations out of the employer’s remit and replace with a single national system.
In an exclusive interview with Payroll World he said: ‘Our position is: it’s an interesting idea. As with anything such as this, which is ambitious, there are significant consequences. One needs to pilot it properly. We need to be able to understand some of the potential difficulties that may arise.’
The proposal stemmed from Vocalink, the payments processing specialist, which approached the Conservatives. The provider would take over the gross-to-net calculation, based on information by the employer. The National Insurance number would operate as the identifier of each employee’s personal account. The objectives are to take this unpaid burden away from employers, and honour the principle that income tax and National Insurance is owed by the individual to the state.
‘What the system does is: as the employers make a payment to the bank account, they will identify that payment through the system by attaching the NI number. What the technology we have looked at does is, as that payment goes through the bank account system, because the personal account is identified with each employee, it will calculate how much income tax and NI to pay.’
Mr Gauke indicated that initially it would be confined to income tax and NI, but he acknowledged that some payrolls were complex, and that there are other deductions to consider, such as court orders and student loan repayments.
‘We are not proposing to rush headlong into something like this; we don’t know what the consequences are, although we think there are considerable gains to be achieved. ‘
He promised to consult with the payroll profession as the Conservatives develop their plans. The party is likely to become the biggest single party after the forthcoming general election, but recent opinion polls indicate it may fail to secure an outright majority of MPs.
• Full interview with David Gauke in the April edition of Payroll World.
10/03/10
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