Consultation on modernising the personal tax system
HM Revenue and Customs (HMRC) consults on increasing the transparency of the personal tax system, which includes PAYE and income tax self assessment.
HMRC considers that, because of the way in which the PAYE system works, not all employees know how to check their tax code and whether or not their data is up to date, and how much tax they are paying and why. The consultation document sets out proposals to improve individuals' understanding of tax and make the tax system easier to deal with.
The Government consults on:
- the introduction of personal online tax accounts, containing up-to-date information on the employee's income and the amount of tax that he or she has paid, including how this has been calculated;
- the introduction of pre-filled tax returns;
- the introduction of pre-filled tax statements; and
- greater education on why tax is collected and spent.
The consultation has been launched amid a range of initiatives aimed at transforming the personal tax system. The consultation document states that: "a simpler and more transparent personal tax and welfare system helps work pay, supports fairness and encourages growth".
The consultation closes on 24 February 2012.
- Modernising the administration of the personal tax system: Tax transparency for individuals Read the consultation document on the HMRC website.
The XpertHR policies and documents section includes a model itemised pay statement.
The XpertHR employment law manual provides up-to-date guidance on PAYE.
The XpertHR FAQs section provides answers to frequently asked questions on PAYE:
- What is the PAYE system?
- What are the duties of the employer under the PAYE system?
- If an employer pays an employee in lieu of notice, is the payment taxable?
- Do employers have to account for VAT in relation to childcare vouchers provided to employees under salary-sacrifice arrangements?
- When do the changes in relation to the VAT treatment of taxable benefits under salary-sacrifice arrangements come into force?