

UK Proposes All Paychecks Go to the State First - agotterer
http://www.cnbc.com/id/39265847

======
anigbrowl
Unsurprisingly, not true.

The discussion document (link below) suggests that instead of sending
employee's tax _information_ to the government once a year, modern computing
and telecommunications would make it easier for everyone if that information
were updated each pay period.

[http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPort...](http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_030623)

In the UK, employers are responsible for calculating and withholding tax, and
only self-employed people need to file tax returns on their own behalf. If you
change jobs it can be 4-6 weeks before your tax paperwork arrivse at your new
employer, because it is sent from your old employer to the treasury from there
to your new place of work; during this time you pay 'emergency tax' at the
highest rate. Any overpayment is refunded as soon as the new employer has the
tax information, but until they get it their payroll will cover themselves by
withholding the maximum. This is not a fun thing when you begin working or
change jobs, because for a month or so your employer is working on the
assumption that you are fabulously wealthy until the Treasury gives them
evidence to the contrary, regardless of how much your actual job pays. So
everyone who enters/moves within the workforce is taxed like a bank CEO for
the first month - something that's a lot more memorable than the refund which
comes many weeks later.

Employer filing of payroll and income tax information each pay period would
eliminate this archaic practice and make it easier for both employers to do
payroll and employees to switch jobs, because the current tax information
could be passed back to a new employer just as quickly, eliminating the
wasteful (and expensive) disruption. They further suggest that if this worked
out well, employers could upload gross pay information and have the treasury
do the work of calculating the taxes, which would reduce employers'
administrative overhead considerably as they would no longer be required to
collect taxes and tax information on behalf of the government. It would also
increase employees' financial privacy, since the Treasury would be storing the
same information that it does now but it would no longer need to be duplicated
in the recorrds of a person's employer for the purpose of calculcating their
taxes.

It even states specifically: _At no stage would HMRC [the tax collection
agency] or its agents have direct access to any money or information contained
in the recipient’s bank account or indeed the bank account itself._

The notion that the money is proposed to go to the government first is simply
Not True. It's a short document written in plain English. There is no way that
CNBC could have interpreted it the way they did unless they are either stupid
or dishonest. You've been had.

~~~
timthorn
That's what I thought initially - but I kept on reading. Chapter 5 details
exactly this scenario, albeit as a "more radical" "longer-term" option.

~~~
anigbrowl
You cannot have been reading very closely Tim, because the quotation about 'at
no stage would [govt.] have access to money or information about the
recipient's bank account, or to the account itself' is drawn from section
5.10.

The ideas examined are for the centralization of payroll information for
purposes tax calculation only. Money transfers would continue to take place
between employee and employer directly, not least because an employer may be
making other deductions for the purpose of pension contributions, union dues
or whatever which do not have any bearing on tax liability.

As I said, in the UK the government already collects all this information
already. The change which is being proposed is to gather electronically it
each pay period instead of a batch at the end of a company's fiscal year.

------
AmberShah
Communism much?

