Posted: 21/10/10 by D N G Dove Naish
HMRC are presently considering a radical change to the way in which employers calculate the tax and NIC that they deduct from our wages…
Not content with requiring that employers file certain payroll returns online each year they are now contemplating processing the calculation of the deductions to be made centrally! In other words your employer will notify HMRC, electronically, on each pay day the gross wage that you have earned and the tax man will then use its computer systems to work out the tax and NIC to deduct. Employers will then be told what to pay.
DNG Dove Naish say: “Every employer in the UK is now required to submit their yearend payroll returns online. Additionally certain VAT registered traders have to file their returns online. The radical step of shifting the responsibility of calculating PAYE and NIC deductions from the employer to HMRC is an innovation that will allow the Government to keep tabs on the Nation’s payroll system in real time. It will place additional pressure on smaller businesses to gain access to a secure, high speed internet connection and develop the computer skills to interact with HMRC’s systems. The alternative is to employ agents to deal with this process for them.”
The problem of course, is do we have faith that the tax man’s computer systems can cope? How will we sort out mistakes in monthly or weekly deductions if we have to deal with endless waits on HMRC help lines? Fortunately this change is still at the planning stage - with a bit of luck that’s where it will stay - at least until we can see more evidence that HMRC’s computer and other support systems work.