HMRC Postpone PAYE Pooling Plan

HMRC have announced, following an informal review of PAYE pooling, that it is to postpone the idea of changing the legislation to give closely connected employers the option of being treated as a single entity for PAYE purposes.

Previously a pilot had taken place which allowed companies who are linked but with different entities and PAYE references, to be treated as one, thereby reducing the administrative burden they faced.

Under the PAYE pilot, a single PAYE reference could be set up for the group, allowing the separate employers within the group to make combined payments and joint returns to HMRC.

However, following the pilot, HMRC have revealed that they are to postpone the idea of introducing PAYE pooling, citing the imminent introduction of the RTI scheme as the reason they are not to push ahead with PAYE pooling for the time being.

Although the idea has been postponed, HMRC were aware that PAYE pooling could have been attractive to the relevant groups because of the easing of the administrative burden, such as being able to make a combined income tax and NIC payment for the various employers within the group.

As a concession to postponing the idea, HMRC have announced that those who have already taken part in the pilot will be allowed to continue to pool their PAYE references together; whilst the taxman has also said it may reconsider its decision not to pursue regulatory change once RTI has been introduced.

As an accountant, Simon Denton specialises in providing PAYE advice, support and guidance.

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