Experts are warning that the National Employment Savings Trust rollout must not be hindered by Government plans to overhaul the pay as you earn tax system.
HM Revenue & Customs’ discussion paper on revamping PAYE closed last week. Plans put forward include a “radical” option of centralised deductions, where gross wages are sent directly to HMRC, which would calculate and deduct tax and benefits, rather than employers.
But Legal & General pensions strategy director Adrian Boulding warns that any PAYE overhaul must not impinge on auto-enrolment plans.
He says: “I would have tho-ught a new PAYE system incorporation would add three years to the start date of auto-enrolment. If we waited another three years for a wonderful new PAYE system we would lose too much time. We must press on and go with what we have.”
Standard Life head of policy John Lawson says the timescale on the overhaul means that a new PAYE system will have to fit in with the Nest system.
He says: “The existing PAYE system is a mess but because it would have to be rebuilt from scratch it would not be ready to implement until well after 2015. The switchover will have to happen after auto-enrolment arrives.”