Now here's a plan (originally mooted in 2010 that appears to have resurfaced) that is guaranteed to fail, if it is enacted.
HMRC are, quite rightly, concerned that the PAYE system is not fit for purpose and want to reform it.
One plan being considered is whereby employers, instead of deducting income tax then paying gross salaries to employees, would pay the gross monthly payment to an HMRC-run tax “calculator”, which would then pass the net salary to the worker; ie employers would hand over the responsibility for paying the correct net pay to HMRC.
Aha!
HMRC are, quite rightly, concerned that the PAYE system is not fit for purpose and want to reform it.
One plan being considered is whereby employers, instead of deducting income tax then paying gross salaries to employees, would pay the gross monthly payment to an HMRC-run tax “calculator”, which would then pass the net salary to the worker; ie employers would hand over the responsibility for paying the correct net pay to HMRC.
Aha!
The plan would mean the end of traditional monthly payslips, because
employers would no longer be able to tell workers how much tax they had paid
each month.
Reform of PAYE is most certainly required, because inaccurate data will again affect millions of people this year who will be forced to pay back underpaid tax, and millions of others who will get rebates.
Anyhoo, wrt the proposed "plan" instead of a payslip detailing pay and deductions, employees would only find out
how much income tax they had paid by asking HMRC.
Oh dear!
Brian Stenhouse of Armstrong Watson was quoted in 2010 by the Telegraph saying that people should have “deep concerns” about the central deductions plan.
Oh dear!
Brian Stenhouse of Armstrong Watson was quoted in 2010 by the Telegraph saying that people should have “deep concerns” about the central deductions plan.
“Are people going to be happy to give HMRC their bank details and trust HMRC to make the right deductions and pass on their salary every month?Along with RTI, this will be another clusterfuck waiting to happen!
Given they’re not going to have a complete monthly payslip any more, people are going to be in dark about what’s been deducted. And if there is an error, they’d be reliant on HMRC to correct it.”
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I wouldn't trust this lot to pay for a paper at a newsagent let alone ensuring I get my correct salary at the right time - you must be fu@king joking HMG, have you lost leave of your collective and vicarious responsibilities?
ReplyDeletePutting this bunch of incompetents in charge of the country's salaries is a joke, and thats before you privatise the resulting chaos as an improvement!!!
Your employer has an incentive to get your payslip right and correct any error quickly. HMRC wouldn't. At least in one employer gets it wrong it only impacts their staff. If HMRC make a mistake it could impact everyone.
ReplyDeleteI'd like to know which complete cretin is even considering this as a viable option. Sack him/her as well as the moran who dreamt the idea in the first place. The paye system is failing because of the idiotic management process which stifles common sense, time saving intitiative at the coal face replacing it with easy to count (toward bonus!) common denominator procedures which take tens if not hundreds of times longer!
ReplyDeleteWhy bother to give the employees their salaries. Why not just keep it because it all ends up being spend on taxes anyway. Instead just let everyone who works or doesn't work have everything made available for free - since the government has already taken YOUR money.
ReplyDeleteI wouldn't trust the HMRC with my Starbucks order, let alone my salary!
ReplyDeleteInteresting to note that the system proposed would be run by VocaLink, experts in secure money transfer but not noted for their expertise in Payroll or PAYE.
ReplyDeleteAlso interesting in that VocaLink have an office in the Consituency of David Gauke MP, Treasury Spokesman.
Also that the double deduction of Self Assessment payments involved Santander, who are part of the VocaLink / Bacs organisation:
"VocaLink Limited is the principal trading entity, which is a wholly owned subsidiary of VocaLink Holdings Limited. A consortium of 18 banks and building societies own VocaLink Holdings Limited, including Barclays Bank plc, Royal Bank of Scotland group, Lloyds Banking Group, HSBC and Santander." - extract from www.vocalink.com