Refresh of the Pay As You Earn (PAYE) system

Drivers for change Around 8 million customers pay the wrong amount of tax each year 5.5 million pay too much tax £ The majority of those who pay too much are the lowest earners (under £15,000) Average overpayment is £450 Those who don’t pay enough tax typically earn over £20,000 45% of PAYE customers receive one or more tax code changes per year It can take up to two years to rebalance tax

Guidance and support materials will be available PAYE refresh will make tax simpler by using real time data to make adjustments to people’s tax codes throughout the year, so they pay the right amount of tax on their income as they earn it.  This is a positive change and will offer more certainty for people, helping avoid tax debt and overpayments Those who are not balanced at the end of the year will probably owe less than under the current system Gov.uk will be updated ahead of the changes and from June following implementation Customers facing financial difficulties can get help online or by phone Guidance and support materials will be available

Simple Assessment

Drivers for change Currently there is no legally enforceable way to collect PAYE debt Customers are sent 2 voluntary payment requests SA Xxx customers in Self-Assessment don’t really need to be there Transferred to Self-Assessment if non compliant Moving towards the end of the tax return

Simple Assessment allows HMRC to make a calculation of Income Tax liability without the need for an individual to complete a Self Assessment tax return. This is a positive change and will allow customers to understand their tax liabilities Calculation will be based on information already held Various payment methods First affected are those with State Pension above Personal Allowance Another customer group affected will be those with underpayments that cannot be coded A single, simplified bill X