Tax
PAYE error: Don't knock HMRC say experts |
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| Tax | |
| Written by Gary Howes | |
| Monday, 06 September 2010 | |
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The UK200Group of independent accountancy and lawyer firms comment on the latest PAYE error revelations.
This weekend new PAYE errors at HMRC were reported by the national press. This is what a number of tax professionals that fall under the UK200Group of independent accountancy and lawyer firms have to say: David Whiscombe, partner, BKLTax, and member of UK200Group tax panel “While it’s always popular to knock HMRC for getting it wrong, this isn’t what’s happened in this case. The simple fact is that the PAYE scheme was never designed to cope with the complexity of today’s tax system. "It’s been failing to do so for years and the systematic errors reported over the weekend aren’t new, it’s just that the introduction of a more sophisticated computer system has brought them to light for the first time." Whiscombe says an appropriate response would be to simplify the tax system further. Anthony Harris, director, Critchleys says: “Let’s take a positive look at this. HMRC have identified the issue themselves, albeit after an internal review. Normally in the past these issues have had to be discovered by the odd million tax payers who individually query their codings and are individually dealt with by Revenue officers." Will Abbot, Partner, Randall and Payne says: “The PAYE system was only ever designed to give an estimated tax deduction, which in most cases is fairly accurate, with the under or overpayments being corrected in later periods. “In recent years HMRC has tried to remove people from the self assessment system by making more use of the PAYE system than it was ever intended for. "So, for example, estimated amounts of private pension income, or savings income have been included in the codes. Finally, HMRC has been using the coding system to collect estimates of tax due on income such as property rent on a monthly basis, rather than collecting through the self assessment system." Abbot says the current furore over the system is what the Coalition wants to hear. It will strengthen their case for reforming the system, and I believe we are heading towards employers submitting monthly PAYE returns online
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