A drastic change to HMRC’s PAYE system, which will provide real-time
information on employees, needs to be sufficiently funded and adequately piloted
if it is to be successful in the coming years, said a Baker Tilly tax director.
HMRC opened a consultation on a computerised tax account for every employee
with the aim that the software will be up and running in the lifetime of the
However, tax director at Baker Tilly, Lesley Fidler, warned HMRC there is a
” long way to go” before the software can be implemented.
“While it is important that there be aspirational goals for our tax system,
HMRC does not have a strong record of implementing IT projects,” she said.
She gave the example of recent efforts to merge the previously separate
computerised National Insurance and PAYE systems, which was plagued by ”
Fidler added: “Anyone who was involved with the short-lived attempt at
paying tax credits via the payroll will hope that this fresh initiative will be
fully researched, adequately piloted and sufficiently funded before it goes
Currently both employers and pension providers make tax and national
insurance payments for employees to HMRC and report them to the tax office once
a year. Annually reporting those figures can result in under- and over- payments
of tax, the
The latest consultation is proposing each employee be given a single
computerised tax account which brings together their employment and NI records,
giving HMRC real time information of all payments made.
According to the consultation document, proposed changes would also remove
the need for employers or employees to fill in forms to obtain the right tax
code, and could simplify the process when a person changes jobs.
HMRC has already invested in the software to create the accounts.
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