Underpaid Tax?

chrisbur

nick74 wrote: »

But isn't the payroll software simply emulating what would have happen if manual deduction cards were used? It would really need HMRC to change the way the PAYE system works in order to resolve this. The payroll software companies can't do this on their own.

Yes the payroll programs have to follow exact requirements laid down by HMRC. The only possible thing that I feel that they could do is incorporate some sort of warning into the program so that all employees were aware that this was going to happen.
If HMRC were to change the method then problems could arise for people changing jobs and moving from a week52 payroll to a week53 payroll.
Personally I think that the answer is to go back to the old system. Give the extra tax allowance and forget about collecting the tax underpaid unless a tax assessment has to be made eg for self-assessment. Though I am a little biased having benefited from quite a few week 53s over the years.

BoGoF

The system isn't perfect but the alternative is to tax the week 53 payment at BR which would then leave people short in their weekly wage....which they would no doubt complain about.