When you load the 2009 HMRC Employers CD-ROM you are greeted with this message, ‘A Helping Hand from HM Revenue & Customs’. I think this message is put there to rile all the HMRC customers who they seem incapable of helping.
Take for example PAYE and the Simplified Deduction Scheme. Here is a system where the responsibility to collect HMRC’s taxes was loaded onto the employer. BUT at the time this system was introduced it was recognised that employers of a single domestic employee should not be required to ‘man’ a system as onerous as that of a company employing 10 or more staff. Hence the Simplified Deduction Scheme, which was a scheme open to employers of domestic employees.
The SDS allowed the domestic employer to be spared the complicated forms and the requirement to know the tax system inside out because they completed simple forms and the tax office helped with the calculations and checked your ‘workings’.
Obviously this system couldn’t be open to all and so an upper earnings limit was put in.
And that is where the catch comes. In order to gradually reduce the number of employers on this system and force them into the full PAYE system the upper earnings limit appears to have never moved or at least it has risen well below the rate of wage inflation. The result is that unless you pay below a living wage for a full time employee there is no way in 2009 that a domestic employer could qualify to be on the Simplified Deduction Scheme.
So today a domestic employer with one gardener/housekeeper etc is either required to wade through the full HMRC Employers Pack and play around with extraordinarily inefficient ‘calculators’ on the Employers CD-ROM or pay a professional to calculate the tax for them.
Had HMRC been a privately run organisation with a focus on it’s clients needs it would, of course, realised the Web was the perfect opportunity to offer a simple online calculator for Domestic Employers. Instead the public sector machine rolls along using all its best know how to find ways of un-improving its service without anyone noticing.