PAYE Pooling – HMRC Discussion Document published
HMRC published a Discussion Document on 24 October 2011 calling for information and views on their proposals to change the Pay As You Earn (PAYE) system to give closely connected employers the option of being treated as a single entity for PAYE purposes (PAYE Pooling). The full document can be viewed here.
Amongst other matters, HMRC would like to receive comments from employers, pension providers and payroll professionals to gauge the level of interest in the idea of PAYE Pooling. HMRC would also like to gather information and views as to how PAYE Pooling might work in practice, in order to identify any issues that might arise and find possible solutions.
In the Discussion Document, HMRC state that the introduction of PAYE Pooling would be in line with the Government’s objectives of reducing costs for both employers and HMRC by making the PAYE system easier to administer, improving service levels for individual customers and ensuring accurate tax deductions. In terms of easing administrative burdens on employers, it is envisaged that organisations, such as corporate groups of companies, professional partnerships, charities and public bodies, who are made up of a number of separate entities, could be treated as a single entity for PAYE purposes and would be allowed to submit combined returns and payments to HMRC under a single PAYE reference.
It is understood that any changes would be developed to fit with the introduction of the Real Time Information (RTI) framework.
It is also understood that, if PAYE Pooling were introduced, it would be an optional scheme in that each organisation would be able to assess the merits of a PAYE Pooling arrangement in light of their particular circumstances and organisational needs and make an application to HMRC for Pooling where appropriate.
EDF Tax says:
In principle, Pooling would help businesses and organisations of a certain size to streamline their PAYE administration processes where multiple PAYE schemes have had to be operated by connected businesses until now. What employers will need to weigh up in due course is whether the benefits to them are worth the time and effort involved in setting up the Pooling arrangement, particularly in conjunction with the introduction of RTI in 2013.
28 October 2011
Who to contact?
For further information contact John Harling on 0115 983 5580 or email at jharling@edftax.co.uk.