Thursday, 7 July 2011

PAYE 2012/13 tax year

Our civil service have come up with another wheeze to keep loads of consultants off the streets.
The essence of the proposals / fait accompli is that instead of employers working out PAYE deductions / payroll HMRC will do it for you, and handily keep their massive chunk out of what you send them, and send the remnant to your employee. Sounds a good idea? Think it through…
In future employers will decide how much to pay the serfdom each month and send a bank transfer to HMRC for the gross plus Employers NIC. 1st pothole àHow will employers know how much to add on ? à they will need a ’payroll package’. And…
¯ HMRC will need to be kept up to date with employees bank details
¯ They will take NO responsibility when they pay the wrong bank account / make mistakes.
¯ What will be the data transfer interface?
¯ What happens if a mistake is made
¯ …And HMRC will have to keep all these records KOREKTLY
And in future when employees wonder why their tax has doubled this month e.g. due to a fatuous PAYE Code being applied they won’t be able to scream at the payroll department in person, instead they will have to ring an expensive 0845 number from their mobile, then wait aeons for some noddy in Gateshead/Mumbai to answer the phone.
They will say “we will look into it and call you back”, nothing will happen so they will have to ring again and ditto. So then they will get REALLY frustrated and go and see whom….? àthe remnant of your payroll department and rant and rave in person as they used to. BUT this time the reply they will get is that “we can do nuffin mate as it is HMRC and they won’t talk to us, only you”. So then the serf will say “I can’t afford to come to work as I have no money due to those little tinkers at HMRCy”, so then you the employer will be lumbered with giving them a loan while the mess gets sorted out, which you will then have to use your (allegedly redundant) payroll department to keep track of etc……
Similarly if they have not received their hard-earned pay from HMRCy how will they get answers/action? Oh and you can bet the national debt they will continue using a stupid bank for payments instead of one FULLY signed up to the Faster Payments Clearing System – effectively HSBC/Barclays only as at June 2011.
¯ What format will the payslips take? How will employees be given them? Zzzzz…
¯ And this all ignores how non-tax deductions from wages will be administered etc.
¯ Oh and of ‘curse’ this means that effectively the whole of UK PAYE will be worked out each month on one smoking amstrad in Newcastle/Bootle which will of course crash due to the work load at end of each month.
¯ And the back-up plan to deal with system failures is……
¯ These proposals are supposed to be welcomed by employers as a massive reduction in their administrative burden.

These guys understand the issues as well

follow this link for HMRC fascinating briefing on the topic. Do they employ any businessmen? Don’t fink so.


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