Ben Gummer MP, a rising star Tory backbencher who has been campaigning on tax transparency, will propose the change in a Commons Bill on Tuesday. The proposed change, which apparently has Treasury backing, would be the first step towards merging income tax with National Insurance. Mr Gummer is reported to have said, “I am very pleased the government is interested in the idea. They have been very receptive to trying to make the tax system more transparent. This would be a really good step forward in making what the government takes from taxpayers clearer and simpler.” Mr Gummer said he hoped the name change would begin the process of merging National Insurance with Income Tax into one single charge. He said: “The most important part is changing the name so in the public mind we can begin the two as the same, which they are. This is a first step.” CIPP comment The CIPP welcome the government’s transparency around the tax system; long overdue. The CIPP does in principle support a change of name if it is the government’s intention, with cross party agreement, to look at merging the two systems. Changing the name just to prove transparency, will put payroll software and other professions (training etc.) within the payroll industry to unnecessary administrative and potentially cost burdens if this isn’t their intention. The CIPP looks forward to the formal announcement from the government and to the consultation from HMRC and or HMT, along with confirmation of when this change is likely to happen. There will be a number of areas to consider in addition to the employee and employer Class 1 National Insurance changes, such as Class 1A and 1B. Any associated legislation will also need to be amended. Your policy team will be keeping a close eye on this and will of course ensure the profession is represented when the consultation starts. Read the full story from The Daily Telegraph .
Amendments to Regulation 72E & F of Pay As You Earn (PAYE) regulations
26 February 2014
HMRC has published for external comment draft Statutory Instrument making amendments to the Income Tax (PAYE) Regulations 2003.
The measure enables HMRC to calculate the amount of tax due where workers whose employment status has been recategorised have made self assessed payments. It also provides HMRC with an option when it issues a notice to the employee of whether to include details of the amounts offset and the tax years they refer to, or merely state the employment to which the notice applies.
The Regulations have been published with accompanying Explanatory Memoranda and TIIN in respect to changes to Regulation 72E and F.
The following is extracted from the Explanatory Memoranda and explains in more detail what the amendments mean for some employers.
The Income Tax (Pay As You Earn) Regulations 2003 make provision, amongst other things, for the recovery of tax from an employee rather than an employer, where it appears an amount intended to represent tax on the PAYE income has been self-assessed or paid on account.
Under the 2003 Regulations, HMRC can, if certain requirements are met, transfer the liability for payment of tax from the employer to the employee. In order to do this HMRC must,
CIPP Policy News Journal
16/04/2014, Page 305 of 519
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