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IPP expresses concerns over PAYE plans

Payroll system specialists have expressed their potential concerns over Conservative Party plans to introduce a new PAYE tax system.

Under the Tory plans, which were unveiled last month, income tax and National Insurance payments would be automatically deducted from an employee's gross pay, rather than being calculated by their employers.

According to David Cameron's party, the proposals could save businesses up to £5.5 billion per year and increase the UK's tax revenues by £1 billion.

But the Institute of Payroll Professionals (IPP) warned that a number of issues exist regarding the plans - and it will discuss these matters at a meeting with international payment transaction specialist Vocalink.

The correct issuing of tax codes and the maintaining of accurate pension records are among these potential problems, IPP explained.

At the meeting, the organisation said it will attempt to identify ways in which the burden on businesses created by calculating tax can be reduced.

"This will ensure that any future proposals for a new PAYE system are realistic, workable and attainable," said associate director of policy, research and strategic visibility Karen Thomson.