The Association of Taxation Technicians (ATT) is concerned that HMRC’s proposal to relax the timeframe in which a revised PAYE code must be issued to employees will have an adverse impact on employees, pensioners with PAYE income and employers, leading to greater bureaucracy and confusion.
The association has published its comments on HMRC’s proposed amendments to the Income Tax (Pay As You Earn) Regulations 2003 relating to the timing and means of delivery when HMRC are issuing notices of coding to employees and pensioners.
It says the delay in issuing notices of coding to individuals by up to 30 days after the tax code has been sent to the employer will inevitably lead to many payrolls being run using amended coding notices before employees are given a chance to check that they are correct.
Natalie Miller, President of the ATT describes the move as ‘wholly illogical’ and ‘very likely to lead to payroll bureaus and employers having to deal with more enquiries and complaints from employees and pensioners who cannot understand why there is a change in their net pay’.
The ATT has taken issue with HMRC’ s rationale that the change will ‘improve flexibility’ and that delaying advice to taxpayers about revisions to their tax codes will improve HMRC’s service especially during busy periods, saying that this approach will immediately push the burden of telephone queries onto employers. It says logically, the onus should be on employees to lodge any challenges or queries regarding correct codes and under or over-payments with HMRC, as it is with the existing process, because only they can question whether a tax code is correct.
In its letter, the ATT voiced its disappointment that there has been very little publicity about the draft SI, despite the implications of its content, which raises concern that this may be an attempt to implement changes ‘by the back door’ which does not seem to fit with the ethos of a ‘consultation’ say Harris & Co accountants Northampton
While the ATT does not have an issue with electronic coding notices in place of paper versions, it says safeguards, such as direct emails to employees informing them of an amended code, should be put in place, as individuals should not be expected to search on HMRC online services to see if an amended code has been issued.