| PAYE could be on course
for significant change following the
launch of a major consultation. The
consultation, announced by HM Revenue &
Customs (HMRC) on 27 July, says that the
business processes behind PAYE have
remained unchanged since it was introduced
in 1944.
The consultation is designed to explore
whether there are alternative ways of
collecting information that would reduce
costs for employers and HMRC and to start
a discussion about the collection of
information on PAYE at the time employers
pay individuals – known as Real Time
Information – rather than once a year, and
how this could simplify processes.
HMRC believes that Real Time
Information would make it easier for
people to pay the right tax after a change
of job and possibly remove the need for
the P45/P46 procedure. It could also offer
the prospect of simplifying the PAYE end
of year reconciliation process for
employers, HMRC and individuals.
In the tax year 2009-2010, PAYE brought
in £249 billion in tax and national
insurance contributions and £1.1 billion
in student loan repayments. It costs HMRC
less than 1p for each pound of tax
collected.
The consultation will run until 23
September 2010 and if responses are
positive, it is likely that a second stage
of consultation will begin in the autumn.
LINKS: Consultation |
