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PAYE pooling plans shelved by HMRC

Her Majesty’s Revenue and Customs has shelved its plans to introduce PAYE pooling after a lengthy consultation, putting an end to the proposed ability for organisations to treat several entities as one for PAYE purposes in an effort to minimise red tape.

As anyone who’s had to deal with PAYE rules will know, it can be a pain to manage several PAYE references if you employ a variety of contractors or freelancers. The administrative burden can be massive for large-scale organisations such as umbrella companies, and hopes were high that HMRC would institute PAYE pooling at the same time that they introduce real-time PAYE reporting requirements in order to make people’s lives easier, but it’s simply not in the cards.

The good news is that if your organisation was involved in the pilot programme associated with the PAYE  pooling consultation, you’ll be able to continue pooling your payroll for the indefinite future. However, since the consultation has come to an end, HMRC is no longer accepting new applications.

The taxman will continue to keep an eye on the organisations involved in the pilot, so there’s always the off chance that HMRC will change its mind and reverse its decision. The real-time information pilot is still underway as well, and while instituting real-time PAYE may be an inconvenience for many contractors and freelancers, the writing on the wall seems to indicate that the government will push through with its introduction – much to the chagrin of many temporary workers.


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