UK proposes all paychecks go to the State first

Little-Acorn

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In case those silly Britishers didn't know who they were working for...

This will let them know who the Boss really is.

Coming soon to a leftist government near you!

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http://www.cnbc.com/id/39265847

UK Proposes All Paychecks Go to the State First

by: Robin Knight
CNBC Associate Web Producer
Monday, 20 Sep 2010 | 7:57 AM ET

The UK's tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer.

Currently employers withhold tax and pay the government, providing information at the end of the year, a system know as Pay as You Earn (PAYE). There is no option for those employees to refuse withholding and individually file a tax return at the end of the year.

If the real-time information plan works, it further proposes that employers hand over employee salaries to the government first. "The next step could be to use (real-time) information as the basis for centralizing the calculation and deduction of tax," HMRC said in a July discussion paper.

HMRC described the plan as "radical" as it would be a huge change from the current system that has been largely unchanged for 66 years.

Even though the centralized deductions proposal would provide much-needed oversight, there are some major concerns, George Bull, head of Tax at Baker Tilly, told CNBC.com. "If HMRC has direct access to employees' bank accounts and makes a mistake, people are going to feel very exposed and vulnerable," Bull said.

And the chance of widespread mistakes could be high, according to Bull. HMRC does not have a good track record of handling large computer systems and has suffered high-profile errors with data, he said.

The system would be massive in terms of data management, larger than a recent attempt to centralize the National Health Service's data, which was later scrapped, Bull said. If there's a mistake and the HMRC collects too much money, the difficulty of getting it back could be high with repayments of tax taking weeks or months, he said.

"There has to be some very clear understanding of how quickly repayments were made if there was a mistake," Bull said.

HMRC estimated the potential savings to employers from the introduction of the concept would be about £500 million ($780 million). But the cost of implementing the new system would be "phenomenal," Bull pointed out.

"It's very clear that the system does need to be modernized… It's outdated, it's outmoded," Emma Boon, campaigner manager at the Tax Payers' Alliance, told CNBC.com.


(Full text of the article can be read at the above URL)
 
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The real issue here is, of course, not whether this system costs more than that system.

It's who receives the paycheck, and who decides which parts of it go where.

In a nutshell: Who does your paycheck belong to, really?

The idea that all paychecks go to the government, is grotesque.
 
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