Payroll insight
There are some (National Health Service) trusts that we do not think are good enough at PAYE. What are your sanctions, or is it just gentle persuasion at this point? At the minute, there are not any sanctions, and neither is there any sort of merit award or gold standard or whatever. We are somewhat more concerned about pension providers – those who are paying out pensions. The systemic point that I am trying to land is that PAYE administrators – organisations, either employers or pension fund providers – have a very variable standard, and we think we need to do something about that. It is also one of the five main causes of customer contact, actually – the employer gets it wrong, and it is perfectly natural, if you get your payslip and you think, ‘Hang on a minute, my tax has changed and it doesn’t look right’, that you might ring us or your employer. What we are identifying is that there is a good deal of failure demand, as we are calling it, in this that is driving customers to contact us. So, we think it would be better all round for taxpayers if we tried to do something about intermediaries. We are working up some proposals that we want to put before ministers as part of the spending review. When you get on to fraud, one of our emerging risks is this payroll bureau question, where we see some cases of payroll bureaux being set up saying that they want to administer payroll for small enterprises but the payroll bureau itself is a fraudulent enterprise and never pays any of the tax of individuals. That is a growing risk, so there are other advantages for us in being more assertive. So, there is no kite mark or anything at the moment, no basic standard? No. Are you saying that you would welcome some sort of sets of standards for these organisations, more regulation? If you want to reduce the gap significantly you have to put more burdens on other parties to collect the tax for you, and
there would be a cost to that. That needs to be a consideration. We don’t think that there are any significantly free shots anymore. ...working up some proposals that we want to put before ministers... What are the main drivers of undeclared income relating to employment, social security benefits, dividends and rents, which are things that we would think are automatically put into the system under the new digital approach? The essential problem is that the claimant has to estimate the income for the twelve months to follow, then the onus is on the customer to tell us about any changes. So, a customer will tell us, but they take some time to tell us, and what has happened in the middle is that a debt or otherwise is built up in between. Are you accepting that there is going to be an element of fraud and error from the benefits system going forward? Yes, but if you create a welfare system, the complexity of any welfare system – unless it is really simple – will have some inherent fraud and error built into it. Some people are bound to get it wrong or they get it in the wrong time. I am not complacent about it in the slightest, but in the end it comes down to: ‘Strategically, where is this? Is it a priority or not, and are we going to put any resources into it?’ In the light of everything else HMRC is doing, those decisions have been made by ministers and we are where we are. We can continue to learn, but at best it is going to be an incremental change. n
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Issue 45 | November 2018
| Professional in Payroll, Pensions and Reward |
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