Whoa! - UK Proposes All Paychecks Go to the State First
 

Just wow.... I find myself wishing there was another planet to go to more and more lately.


The UK's tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer.


Sharon Lorimer
The proposal by Her Majesty's Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid.

Currently employers withhold tax and pay the government, providing information at the end of the year, a system know as Pay as You Earn (PAYE). There is no option for those employees to refuse withholding and individually file a tax return at the end of the year.

If the real-time information plan works, it further proposes that employers hand over employee salaries to the government first.

"The next step could be to use (real-time) information as the basis for centralizing the calculation and deduction of tax," HMRC said in a July discussion paper.

HMRC described the plan as "radical" as it would be a huge change from the current system that has been largely unchanged for 66 years.

Even though the centralized deductions proposal would provide much-needed oversight, there are some major concerns, George Bull, head of Tax at Baker Tilly, told CNBC.com.

"If HMRC has direct access to employees' bank accounts and makes a mistake, people are going to feel very exposed and vulnerable," Bull said.

And the chance of widespread mistakes could be high, according to Bull. HMRC does not have a good track record of handling large computer systems and has suffered high-profile errors with data, he said.


The system would be massive in terms of data management, larger than a recent attempt to centralize the National Health Service's data, which was later scrapped, Bull said.

If there's a mistake and the HMRC collects too much money, the difficulty of getting it back could be high with repayments of tax taking weeks or months, he said.

"There has to be some very clear understanding of how quickly repayments were made if there was a mistake," Bull said.

HMRC estimated the potential savings to employers from the introduction of the concept would be about £500 million ($780 million).

But the cost of implementing the new system would be "phenomenal," Bull pointed out.

"It's very clear that the system does need to be modernized… It's outdated, it's outmoded," Emma Boon, campaigner manager at the Tax Payers' Alliance, told CNBC.com.

Boon said that the Tax Payers' Alliance was in favor of simplifying tax collection, but stressed that a new complex computer system would add infrastructure and administration costs at a time when the government is trying to reduce spending.

There is a further concern, according to Bull. The centralized storage of so much data poises a security risk as the system may be open to cyber crime.

As well as security issues, there's a huge issue of transparency, according to Boon.

Boon also questioned HMCR's ability to handle to the role effectively.

The Institute of Directors (IoD), a UK organization created to promote the business agenda of directors and entreprenuers, said in a press release it had major concerns about the proposal to allow employees' pay to be paid directly to HMRC.

The IoD said the shift to a real-time, centralized system could be positive as long as the burden on employers was not increased. But it added that the idea of wages being processed by HMRC was "completely unacceptable."

“This document contains a lot of good ideas. But the idea that HMRC should be trusted with the gross pay of employees is not one of them," Richard Baron, Head of Taxation at the IoD, said in the release.

A spokesperson for Chancellor of the Exchequer George Osborne was not immediately available for comment.

17 καὶ ἵνα μή τις δύνηται ἀγοράσαι ἢ πωλῆσαι εἰ μὴ ὁ ἔχων τὸ χάραγμα, τὸ ὄνομα τοῦ θηρίου ἢ τὸν ἀριθμὸν τοῦ ὀνόματος αὐτοῦ. 18 ὧδε ἡ σοφία ἐστίν· ὁ ἔχων νοῦν ψηφισάτω τὸν ἀριθμὸν τοῦ θηρίου, ἀριθμὸς γὰρ ἀνθρώπου ἐστίν· καὶ ὁ ἀριθμὸς αὐτοῦ ἑξακόσιοι ἑξήκοντα ἕξ.

fuck that shit.

Thanks for your contribution Agent 488 :1orglaugh

By the time all the software, hardware, people, training, processes, procedures are all in place... you are looking at 10 years before its even begun.

Oh, jeeze okay,... I thought it was tomorrow so it sorta scared me, ten years away is much much better :1orglaugh

This sort of shit began in Britain a long time ago with The Madness of King George. Any wonder the American Colonies revolted?

Just sayin'.

Sally.

haha i hope that the brits have a civil war.

Are you retarded?
Or just a fucking idiot?

Is it greek? :upsidedow

Pretty much why we became the USA right.

Theres no way in hell thatll happen

It'll never happen

Too many Muslims there now for that and what with British courts now enforcing Sharia law.........well, you know.

Just sayin'.

Sally.

some of you are very stupid to believe this shit

very

You're fucking retarded.

Won't happen.
Blood tax man, quick enough to mug you when you underpay yet take there time when you overpay.

Last time there were big tax changes, ended up in riots and the tax changes went away.

This is not a problem because of your life expectancy or because the world ends in 2012?

This is what happens when you've had a socialist government for too long, people start thinking that ideas like this are acceptable. Instead of making HMRC more powerful the current Conservatives would do better to make the tax system far more streamlined.

It probably won't happen, but thats not the point, it's the fact they think its OK to talk about it as a possibility that pisses me off. If you've ever had to deal with the UK tax authorities, especially the ones that collect VAT, then you'll know one of their favourite phrases is that it never was YOUR money it was always theirs.

If they want a cost saving merge National Insurance and Income Tax and just collect it once, instead of TWICE.

There will never be a civil war in the UK, or if there is it'll be fought with spoons, because anything vaguely pointy or shooty is illegal here.

This is the country where you need a license for a telly, and it was illegal to sell milk in shops not that long ago.

Indeed, only trouble with that is, the sheeple would wake up and realise the basic rate of income tax in the UK is actually 31% not 20% as the government would like them to believe.

The have to pay a yearly tax to even own a TV there. They have vans that drive around looking for signals from unlicensed tv's. if it could happen anywhere it's there.

I'm seeing a trend. :1orglaugh

Exactly. The tax man can come up with crazy schemes all day long, to keep people employed thinking up crazy schemes. Getting it past the electorate is another matter.

As for the saving of 500 million to employers, it'll add 1 billion to the cost of tax collection.

Amazing what some people believe.

Tell that to CNBC. They are reporting it...

And people believe it?

The tax office can propose whatever they want however it will never get passed.

Does that mean Canada would have to send their checks to England? How does that work?

The UK has done such a bang-up job with the economy, pensions, and health care... it only makes sense to send them all money first.

EH! what are you on about? We pay a licence fee for the telly, yeah but it pays for the bbc and i'm glad we do. The beeb carries no advertising, many of the other channels are all but unwatchable now because of all the advertising interuptions.
And as i understand it, the advertising supported channels are still not half as bad as the american counterparts for interruptions.

Pays for the BBC, well worth the money... in Italy you pay a tax but still get advertising on the state run channels.

We have free channels, too, quite a few of them. They do have advertising though.

:1orglaugh

It's only a random idea document that has been produced by someone who's job is probably going to be having silly ideas all day.

Someone???

Think whole departments. :1orglaugh

Wow... wtf...

but that is pointless, they already know how much you earn, so what will this new system actually accomplish?

That shit is not new at all, been working in USSR for years.

What I've never understood about taxes is why they don't just tax all and any money transfered. Any transaction, bam.

3 reasons
They get their hands on the money 3 months earlier. makes the yearly accounts look good if you don't have to borrow for a qtr.

Only once a year is everything checked that its correct, so it could result in a large under/overpayments.

Companies go out of business owing the taxman money, this way it's impossible to owe more than 1 pay period in taxes.