Taxman wants all our wages

THE taxman could soon be getting his hands on all our hard-earned gross pay before we see it, it was revealed yesterday.

The taxman could soon be getting his hands on all our hard earned gross pay before we see it The taxman could soon be getting his hands on all our hard-earned gross pay before we see it

In a move branded “off-the-wall” and a “recipe for disaster” by financial experts, Her Majesty’s Revenue and Customs has revealed it wants details of all our gross earnings passed by employers straight to a central computer.

The taxman could then deduct income tax, national insurance and any student loan payments – before money is paid into our bank accounts like a parent doling out pocket money.

EXPRESS OFFER: CLAIM £15 IN FREE BETS HERE!

The move would remove from the employer completely the task of deducting tax, passing it instead to the Government – effectively making us all State employees. But coming so soon in the wake of a host of embarrassing and costly blunders by HMRC, critics angrily condemned the proposals last night. Many also questioned why the public should trust HMRC with their gross earnings when millions of taxpayers were still battling the revenue over its ­latest computer glitch.

Emma Boon, Campaign Manager of the TaxPayers’ Alliance, said: “After recently telling six million people they’ve been paying the wrong income tax for the past two years, there’s no way we should reward HMRC for failure by giving them more power and responsibility.

“Let’s not forget it was also HMRC that lost discs with 25 million people’s details on. Can we really trust them with an enormous database of payroll details? Hackers would have a field day.”

The proposal is outlined in the Revenue’s new discussion paper on simplifying the PAYE system. It suggests several possible improvements. But it adds: “HMRC has considered a further, more radical option ... centralising the calculation and deduction of tax.”

The paper says: “Under Centralised Deductions the employer would send the gross payment through the electronic payment system to a central calculator where the deductions calculated by HMRC would be made automatically. The resulting net payment would then be sent to the individual’s bank account and the deductions would be paid directly to the Government.”

Richard Baron, head of taxation at the Institute of Directors, said: “The suggestion that gross pay might flow to a central computer, which would then pass net pay to employees, is completely unacceptable.

“Sooner or later the system would break down and some ­people would not get paid.”

Accountants were also sceptical. Angela Beech, tax partner at Blick Rothenberg, said: “It is an off-the-wall idea which is a potential recipe for disaster. There would also be enormous security concerns.”

However, last night a spokesman from HMRC tried to play down the significance of the new centralising proposal, stressing that it was at a very early stage.

He said: “No decisions have been made about the future of PAYE. It is for Treasury Ministers to decide about any possible changes. The centralised deductions concept is not about wages being centrally administered by HMRC or any other agency.

Would you like to receive news notifications from Daily Express?