John Whiting, CIOT Tax Policy Director, is quoted on Shout99:
"The fundamental aim in this area has to be to get PAYE deductions to be more accurate so that the numbers of taxpayers over and underpaying each year are significantly reduced.
The idea of information flowing from employers to government as soon as circumstances change, rather than being reconciled at the end of the tax year, is a seductive one, but this proposal would be likely to load additional costs onto employers, particularly those who do not currently use electronic methods for paying their employees.
The real benefits of real time information would only be seen if the system became truly interactive and allowed three-way communication and data transfer between employers, HMRC and employees.
We are a long way from that.
The proposal for centralised deduction of tax by HMRC should reduce employers' admin burdens, but raises many other issues. Having the wages of every employee in the country passing through one huge data processor is high-risk and many people would be concerned by the prospect of their wages passing through the Government's hands.
HMRC's help and advice services would need much greater resources if they are going to have to field the enquiries about deductions currently being fielded by employers."
I cannot see the government providing HMRC with the resources it would require to make this proposal a success.
Tax does have to be taxing.
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