Now taxman wants to take your money before you can even bank it

Now taxman wants to take your money before you can even bank it

www.thisislondon.co.uk

HM Revenue & Customs risked fresh public anger today with a “radical” plan to deduct tax directly from workers' pay packets.

“This suggestion that gross pay might flow into a central computer, which would then pass net pay on to employees, is completely unacceptable. Sooner or later, the system would break down and some people would not get paid.”

(visit the link for the full news article)


Related News Links:
customs.hmrc.gov.uk

So the taxman wants your gross salary paid to them from your employers, they will then calculate and deduct the tax and forward on to you the balance, no this is no April Fool thing they seriously are considering this and UK paye taxpayers have until Thursday 23rd September to send them their thoughts on it.

Every PAYE earner could effectively be working for the state!

I'm guessing one or two might have something to say about this proposal especially in light of their recent blunders in regards under and overpayments of PAYE tax.

My thoughts, UNBELIVEABLE!!!!

The 2nd link is for a download of the taxmans proposal, laughably entitled - "Improving the operation of Pay As You Earn (PAYE)"

Discussion document on improving the operation of Pay As You Earn (PAYE)
(visit the link for the full news article)

That's how it works here mostly.

I don't get asked to pay, it's taken before i get it.

From their perspective it's efficiency.

that is also, more or less, the way it works in Indonesia. My employer directly deducts what I owe to the state and gives me a pay slip detailing everything. It is fine with me, more convenient and i dont have to care about any further deductions from what is in my bank account. On a positive note even the state here can not look into your bank account (unless its court ordered). So lets say you work in some home business and deposit it into the bank, the state will not know of it...

You misunderstand;

your employer pays you and forwards the tax to the taxman, now the taxman wants all your money first he takes the tax from your gross salary sent to him by your employer - then you get it.

If its wrong, you will have to contact the taxman rather than speak to the accounts dept of your employer.

Originally posted by ukWolf
You misunderstand;

your employer pays you and forwards the tax to the taxman, now the taxman wants all your money first he takes the tax from your gross salary sent to him by your employer - then you get it.

If its wrong, you will have to contact the taxman rather than speak to the accounts dept of your employer.

oh ok sorry.... now that woudl suck big time. i would not trust my state a second with my whole pay in their hands...

Corporations are little more than collectors of Tax in the USA. If i was late with the tax payments, it was automatic 10% fine, regardless why, i could have been in Auto accident, there was a 10% fine. Which could be tens of thousands of dollars, depending on the payroll.

Sold the company in 2005, and glad i did. Its just too much stress and issues with the Bureaucracy in the USA, California Especially. I would receive Statements from the Franchise Tax Board ( state Tax Agency) that i owed 170,000, sometimes several hundred thousand. This occurred 3 times in 7 years. I would be forced to prove i didn't owe the tax, instead of the FTB providing evidence for their statement...it was nonsense.

The USA would be so much better off with flat tax system, everyone pays 15% no matter what. It would instantly move the USA to balance the budget and allow companies and people to actually save and invest and not be penalized for it.

Under the current PAYE sysem in the UK, my salary is paid directly into my bank account by my employer on the same date every month and clears immediately.
I wonder if, under this new scheme they are proposing, there will be a "clearing period" for payments? Just think of it - employers pay HMRC who then hold the money a few days before paying the employees. That'll sure swell some bean counters balance sheet!

Also, taking past performance of government IT run projects as an indicator, this will fail big time and result in many people not getting paid on time. I wonder too what the cost of setting up the IT infrastructure for this will be, and how late and over-budget it will be too, again based on past performances?

The government should get an immediate slap-down from every working person in the country on this issue. They do not need, nor should have, control over any of my money.

Originally posted by harryhaller
That's how it works here mostly.

I don't get asked to pay, it's taken before i get it.

From their perspective it's efficiency.

Yes, a very efficient form of theft I must say. Like they could care less if you have enough left to pay bills with. They were never taught any manners when they were young, like asking first before taking something. Makes you want to reach out and touch them (with five knuckles).

reply to post by ukWolf


Lets make this clear shall we? An office which has demonstrably FAILED to balance its own books, now wants control over pay BEFORE WE EVEN TOUCH IT? They can officialy get bent. If they even TRY to do this, I swear there will be hell to pay. The working man in this nation has had enough crap from HMRC over the last few decades, and any more of this manner of nonsense will see every suit in parliment, and every tax official dragged from thier places of work and murdered (justly) in the street.
I hope the bloke that came up with this strategy gets a sledgehammer to the neck and urinated on by the populus. Scum bags the lot of em.

reply to post by ukWolf


I seriously hope I'm reading this wrong.
But, every paycheck I get has the tax held immediately before I see 'my' money.
Now, the 'taxman' may not get my full paycheck right away...but I still don't see the difference.
I get my paycheck and the taxes are already pulled out before I actually get my 'earnings'...
Problem with that is trying to find an employer who won't hold taxes (or w2 in USA)...

So, unless I'm misunderstanding the OP, that's the way it is.

We, the people, have let it get this way...

Another problem I can see with this, for the worker, is that if you have fines or some form of debt to the government, they can just take it, or allotments, before you get whats left.

Then that could also lead to debt collectors maybe seeking legislation allowing them to do the same.

I like our system in Aus of paying tax before we get it & then getting a little bonus at tax time for the extra they usually take, but this plan opens up a whole world of new ways to get what you owe anyone, before you can buy food or pay the rent.

reply to post by havok


they are proposing that they receive ALL of your wages first, thay will calculate the deductions to be made, then transfer tha balance on to your bank account.

So all of your income goes to the taxman / government - and like Snafu38 says next, how long before other organisations start lobbying to have their slice before YOUR wages even get to you.

Or what if they make an error, how long will you have to wait untill any corrections are made, how will you manage.

This will give them even greater control over your life

As disturbing as this is there is also another aspect that has more than likely been considered...

Billions of dollars a month in pay checks going to an escrow account for the extraction of taxes before being sent to the peasents.. er workers...

Does anyone doubt for a MINUTE that they wouldn't be having that money flowing into interest bearing investments just as banks do? This scheme could make them money hand over fist.

Im glad you brought that up....it was one of the first things to enter my thoughts...these bastardos will be making shakey investments with our cash and then tell us they cant pay us.....
This is an obvious power /money grab that should be flatly rejected in no uncertain terms fast.

reply to post by ukWolf




Well, it had to happen didn't it? No more fooling around. No more pretence. Put it on the table: who's who and what's what and where the peasants stand.

I can hardly wait til they start funnelling all the tax $$$ straight into the corporate coffers, instead of via tax cuts, contracts and purchases. All in the name of "efficiency" and "good business."

Originally posted by SNAFU38
Another problem I can see with this, for the worker, is that if you have fines or some form of debt to the government, they can just take it, or allotments, before you get whats left.

They already can. A few years ago I fell behind in my Council tax payments. Before I knew it, a court order had been issues and my employer had to make deductions from my pay for the debt. When they do this, they make no allowance for anything else you might have to pay and I was losing something like 20% of my pay for 3 months to cover the debt, as well as the around 30% I pay in tax. Needless to say, I was rather skint for a while.

My own fault mind, should have paid the tax on time.

That said, this article is being slightly overblown.

This whole idea is merely a Treasury discussion paper. It isn't any kind of proposal to become law in the slightest and will most likely end up in the trash bin.

Government departments do things like this all the time, some ideas are quite cooky (getting rid of the RAF for example or taxing people on their Phone lines to pay for broadband expansion) but they love their paperwork so they issue papers to "discuss" (costing tens or hundreds of thousands) then bin it once the various interested groups of people have fought about it for a couple of years.

It just so happens the media caught this one then inflated it to make it sound scary and imminent. It isn't.

The sheer practicality of it would make it almost impossible, even if the Government had a good track record in IT projects. I shouldn't worry too much about it, especially seeing as the corporations themselves don't agree with it.

after our beloved officials let a certain communications company off the hook with a tax liability of £6bn, i am not surprised that this sort of proposal would come up. they and other departments have all been found wanting. with regards to the so-called coalition who are aware of these matters, i feel they all should be slapped in public at every opportunity. it will not bode well for us small fry as the corporations set up more and more offshore havens in order to reduced their tax obligations to a trickle. all attention will turn to us in one form or another for further squeezing! i smell mutiny and sedition on the horizon me hearties.
regards fakedirt.

Taxes have been deducted from paychecks in the U.S. for as long as I can remember, Federal, State, Social Security and Medicare, it's called payroll taxes. The amounts deducted depends on how many Dependants you have with the exception of Social Security/Medicare which 7.65% is deducted up to a certain amount of income, think it's $90,000.00 a year and believe me the average person doesn't make that much.

It doesn't end they we also pay sales tax on most everything we buy with exception of food which varies from state to state, my state is 6% and California is up wards of 8%.

Your paycheck can be also be levied for child support and back taxes which is court ordered.

reply to post by Aquarius1


Right, but this is not what the OP describes. In the USA, the taxes are removed *by the employer* and sent to the government. The OP is describing a situation in which the *entire paycheck* is sent to the government who then sends you what's left after they do their nonsense with it.

There is a buddy of mine who has never earned enough to have to pay any texas, thus he has never filed his taxes. He has set his witholdings to max so that no income taxes are removed from his check. In something like this, he may not have such a luxury.