You can’t hurry PAYE

SO THE GOVERNMENT has decided in its effort to reduce red tape for businesses it is going to change Pay As You Earn (PAYE) technology.

Apparently printed P45s and P60s will cease to exist in the future. Employees will instead have individual online technology profiles, which can be updated by both employers and the taxman, in theory delivering real-time information.

However, it seems the timescale of this implementation is already going askew.

Similar to the introduction of new online tax technology, iXBRL, the institutes are rallying for a delay to implementation – although no delay was granted for iXBRL.

The government’s schedule will see HM Revenue & Customs supplying software suppliers such as Capgemini with data information to build the systems by the end of the month. In just a year’s time volunteer employers will test the system. Then eight months later in January 2013 the system will be mandated and all companies will have to use them.

Eight months?

If, in this short timeframe, there are teething problems with the software they will have to be reworked and retested before the deadline. As this is an introduction to a new and unfamiliar way of filing PAYE, not to mention unchartered technology, eight months seems too little time to me, and several other bodies including BASDA, CIoT and ICAS.

With iXBRL’s introduction this year, HMRC is offering to go easy on companies for the first two years. During this time if there are incorrect tax submissions, or mistakes, because of software, HMRC will refrain from issuing penalties.

What will they do for PAYE which also has brand new technology and an even tighter schedule?

Related reading