Things You Didn’t Know About PAYE

With the deadline looming for firms to implement a new automated payroll system in real time, the taxman has put together a list of fascinating facts about the Pay As You Earn (PAYE) system, which is about to go through the biggest shake up in its history.

For example, the man who piloted the concept of PAYE some 70 years ago, Sir Kingsley Wood, died unexpectedly on the day the system was to be announced in Parliament.

In addition, since the system began in 1944, the number of people registered for PAYE has doubled, from 15 million then to over 30 million today and today there is much more fluidity in the labour market, thereby leading to a lot more reporting.

Talking of which, the reporting often leaves a lot to be desired, as every year the taxman received incorrect or incomplete information from employers about their staff.

For example, in the 2009-10 employer returns, apparently 507 workers were called A. N. Other, while 128 people were entered on returns as Mr, Ms or Mrs Dummy.

Similarly, 75 staff had the surname ‘Casual’, if they worked part time, and students or workers appeared to have been born to do the job, as 9 had the surname ‘Worker’, while six ‘Students’ were on various payrolls.

But these were perhaps easier to track down than the 824 employees with the surname ‘Unknown’ or the 15 that were called ‘Not Known’. Fortunately, seven were ‘Known’ – just not what their real surname was.

When RTI does come into force, please don’t fall into the trap of referring to employees as ‘Test’ or ‘do not use’ or they might be confused with the 100 plus workers of those names that HMRC has already met!

Finally, during the 2009/2010 tax year, over 2,000 employees apparently had the National Insurance number AB123456 and forty workers were doing remarkably well for being over two hundred years old according to their dates of birth!
As an accountant, Simon Denton specialises in providing PAYE advice, support and guidance.

Posted in News.