Saturday, 20 February 2010

More thoughts on these PAYE changes

OK, there's 2 ways that this Conservative plan can work:-
  1. Company pays money to Inland Revenue who subtract the PAYE amount before passing it onto the bank account of employee
  2. Company pays money to Bank Account and then sends a notification to the Inland Revenue that they paid employee 1234 the amount of £1800 and to remove the tax from the bank account of the user.
Now, I really can't see #2 flying with the population of this country. The Inland Revenue regularly deducting pay a few days. Will go down like a lead balloon.

Which leaves #1. Firstly, this relies on the Inland Revenue calculating the amount correctly and quickly posting to someone's accounts. That means not fucking it up, not having system crashes and so forth. And with the normal Fred Karno's Consultancy Armies that get hired, I wouldn't bank on that.

But it's also going to require a complete reworking of processes to support this (in fact, either one will). It will mean changes to existing payroll packages to also send additional packets of information to whoever receives this stuff. Now, what's the cost of that going to be?

And how much is it going to replace software anyway? If you're a business, you're still going to want to track payroll costs, you're still going to want to have some software to calculate things like bonuses, overtime etc.

And what happens about payslips, notifying employees about the split between tax and NI? How's that going to be done?

Staff who are paid cash? Staff who have international bank accounts?

Lots of questions, and I doubt that Cameron has spent even 5 minutes thinking about them...

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