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Government consults with payroll on changes

David Gauke, Exchequer Secretary to the Treasury, has announced he will include the payroll industry in formal consultations on tax simplification. This has followed months of requests from individuals in the payroll profession and software industry.

At the October Payroll World conference, when Mr Gauke gave the keynote address as a shadow speaker, it was suggested to him that those who operate the PAYE system should be brought into consultations on reform. ‘I consider myself duly lobbied,’ he replied.

The Institute of Payroll Professionals welcomed the move: ‘It was very welcome that the payroll industry was recognised in the Budget statement as being a key stakeholder,’ said Karen Thomson, head of policy at the IPP said.

There are few details yet available on the remit of the tax simplification review. The specific proposal put forward by the Conservatives in opposition for a radical change to a centralized, automated PAYE system (see Payroll World April 2010) has not been mentioned by the coalition Government yet, but it has not been ruled out.

At the Payroll World conference last October, Mr Gauke committed the Conservatives to the ‘Lawsonian’ principle of a simple tax system, with minimal different rates or exceptions, not trying to fine-tune the behaviour of companies or individuals. The Conservatives are in coalition with the Liberal Democrats, so any review will have to take the nature of coalition government into account.

23/06/2010