Wednesday, 8 September 2010

Your Money or Your Life

You may well be aware that at the moment letters from HMRC are being sent out to individuals who have paid too much or too little tax through the PAYE system. As far as I can ascertain this is because the individuals were given the wrong tax code, whatever the reason, it seems to be universally agreed that the root cause is due to HMRC.
Imagine my surprise then when I heard that HMRC are proposing that we move to a system where your employer pays your gross salary to them, they make the tax deductions and then put the net amount in your bank account. The details are in this consultation document. What made me laugh when I read it, was the first line of paragraph 5.13 which read

“HMRC would be responsible for ensuring deductions were correct”.