HMRC Considers Plan to Collect Tax Directly

HMRC Considers Plan to Collect Tax Directly

A controversial plan by HMRC to deduct tax directly from employees bank accounting is being considered, it has emerged.

Currently, it is the obligation of employers to deduct income tax and national insurance from employees, and then pass the collected monies on to the tax office.

The new plans appear on a discussion paper regarding simplifying the tax system which states: “HMRC has considered a further, more radical option, centralising the calculation and deduction of tax.”

If this was to go ahead, employers would no longer be responsible for the calculation and deduction of tax and NI. Instead, the tax office would deduct the liabilities before the salary was paid into employees bank accounting.

Whilst there is a widely held desire to improve the current tax system, these new proposals have found little support.

The head of taxation of the Institute of Directors, Richard Baron said: “The suggestion that gross pay might flow to a central computer, which would then pass net pay on to employees, is completely unacceptable. Sooner or later, the system would break down and some people would not get paid.”

Ricky Steedman

Ricky worked as an Investigator in the Inland Revenue for over 20 years before founding Steedman & Company in 1987, giving him the experience and knowledge that enabled him to help so many clients over the years.

His appearance on a Channel 4 television programme about the inside workings of Revenue and Customs was watched by 4.1m which sealed his status as one of the most highly respected tax consultants to ever work in Scotland.

Ricky led all tax investigation and COP 9 cases, using his extensive knowledge to help people reach a positive resolution to their situation.

Ricky passed away suddenly and unexpectedly in June 2022 after leaving his indelible mark on the company he founded and headed for over 35 years.