REWARD
Don Macarthur MA PhD FCIPP, CIPP Payroll Assurance Scheme (PAS) assessor and former HM Revenue and Customs (HMRC) official considers how the tax system has evolved over time, and whether this has helped or hindered financial awareness of employees
L ooking back at changes in the world of payroll, pensions and reward over the past 20 years or more, it’s sometimes difficult to assess whether things have improved or worsened for employers. There are clear examples of things that have got better, but there are also examples of things that have got worse. The replacement of paper by online processes, for example, has undoubtedly saved payroll professionals frustration and hard manual work – and a lot of office space. But on the other hand, we used to take for granted that you could phone a named contact in a local tax office who knew you and who could answer your
More taxing, or less? If we look first at the world of tax and National Insurance (NI) – my world – it’s interesting to remember the original vision for pay as you earn (PAYE). The chancellor at the time, Sir Kingsley Wood told Parliament of his ambition that one day, PAYE would deduct exactly the right amount of tax during the year so there’d be no need for any bills or refunds after the year end – and maybe little need for employees to ask for help to understand their tax position. We were quite a long way short of that dream from the beginnings of PAYE in 1944. Tax codes were appropriately named: like all codes, they were
queries quickly and efficiently – that facility has simply disappeared. It won’t be long before our grandchildren simply won’t believe us if we speak of a day when you could ring any company or government department and they would pick up the phone and answer your questions straight away. And these are just a couple of examples of the massive changes in the world of the payroll professional. But what about our employees or pensioners? Have these changes helped them or hindered them? Do you see a reduction in the number of times when they ask their payroll team to explain something that’s left them completely baffled, or have these calls increased?
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 34
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