Get your employee PAYE information correct

HM Revenue & Customs announced this month that a number of people will be receiving a tax refund (or worse a tax demand) as a result of HMRC now having the computer technology to tidy up the back log of cases it has been dealing with. Naturally this received a lot of publicity. We would all like to be one of the people who received a tax refund, but actually what this means is that these people were paying too much tax for a period of time. Indeed HMRC have recently disclosed that up to 6 million people paid too much tax through the pay as you earn (PAYE) between 2003/4 and 2007/08. What, as an employer can you do to ensure that employee PAYE information is correct?

The first step is to get the basic employee information correct. In a recent publication, HM Revenue & Customs revealed that around 80% of errors in employee data were due to incorrect names, dates of birth or national insurance numbers. Examples given by HMRC included people being 200 years old because of incorrect dates of birth, and people having surnames such as “casual”, “cleaners” “students” or just “unknown”. This can cause all sorts of problems for the employee.

The next step is to ensure that HMRC are notified as soon as possible where there is a change to circumstances for example a change in benefits or simply ceasing to work. Most importantly of all however is just to ensure that the correct tax code is being used and to notify at once if it appears incorrect.  We have a lot of experience in dealing with PAYE issues therefore if you would like further information on this subject please do not hesitate to give us a call on 01733 371180.