Collecting Debts through PAYE: HMRC discussion paper
The CIOT comments, sent on 13 May 2011, regarding the HMRC discussion paper which proposes to increase the ‘small debts’ coding out threshold from £2,000 to £3,000 from next April. The CIOT's submissions and HMRC's responses can be found here.
We have previously commented three times on collecting debts through PAYE (see attached):
- 24 September 2007 submission [pages 10-11] deals with the issue of tackling the debt problem, when we agreed that it was a sensible idea to collect small debts this way but we thought that the amount should not be over £2,000 and that the taxpayer should have to agree to the collection through their tax code;
- 6 March 2008 submission [pages 4-5] when we raised problems with collecting SA debts through PAYE; and
- 1 July 2009 submission, which responds to draft regulations published alongside the Finance Bill 2010 and where we commented on the lack of taxpayer choice.
HMRC’s policy objective is to reduce its costs associated with direct collection and move small debts into the PAYE system. Included in the discussion paper is three sets of draft regulations.
All the documents and responses are available here in Adobe (pdf) format.
UPDATE
HMRC have responded to our submission of 13 May 2011 with 'Summary of Responses: Collecting Debts through PAYE', received on 28 June 2011.
Technical Team
13 May 2011
