As we learn that many tax calculations under the Pay as you earn scheme have been wrong for years, the Treasury is busy consulting on taking over the task of running the payroll for every employer in the country.
I jest not. That is the bottom line of their consultation. Apparently, because so many PAYE accounts have been charged the wrong amounts for years, the answer is for the Revenue to play a much bigger role in sorting out your pay.
The Consultation paper suggest a three stage approach. In the first stage employers will have to supply the Revenue with weekly or monthly details of all pay and tax charged, so the Revenue can see if a new code number or basis for the calculation is needed. Smaller companies that do not have the necessary computer programmes will be able to seek assistance of an unspecified amount to change their systems so they can talk directly to the Revenue to comply.
In the second phase, the Revenue will take on the task of working out the tax for every employee, harnessing the now assured mutual working between the Revenue’s computer and each employer’s computer.
The final denouement comes with the Revenue effectively running the payroll for each firm, charity and state institution.
I am sure the Treasury would like to hear from you if you think this is a good idea, and you might like to tell them if you think it a bad idea. I have already sent in my comments. I am not sure I should reproduce them here.
You might like to ask amongst other things how this would ensure accurate tax, as the employer does not know the details of an individual’s savings or casual income, and how much risk there would be in having such a huge national computer system to handle so much money each week and month.