VISCOUNT MERSEYasked His Majesty's Government why employers are required to make monthly returns of those of their employees who are not liable to Income Tax; and whether some modification can be made in the amount of labour and paper thus involved.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PAKENHAM) 370WAacre of Planting operations in the Forestry Commission's forests during the years 1925, 1930 and 1935 were as follows:
all that can be supplied for recent years. For purposes of comparison, figures for the earlier Years on the same basis are also shown:
Employers are not required to make monthly returns of their employees, whether liable to tax or not. The only monthly action between the employer and the Department is to pay over to the collector the tax deducted under "Pay as you Earn" in the preceding month. The employer is not required, as the question suggests, to make specific returns relating to individual employees. If no tax is payable to the collector for a particular month (because no tax is deductible or because the amount repayable exceeds the amount deductible) the employer is required to notify the collector that no tax is payable. Tax deducted by an employer under "Pay as you Earn" is Crown money in his hands, and this procedure is necessary to enable the collector to ensure that it is paid over to the Exchequer with due regard for the date provided by the law. The employer makes an annual return of the tax deductions from employees, for he has to send in at the end of the year the tax deduction cards showing for each employee the total wages paid and particulars of the tax deducted.
It may be that the noble Viscount has more particularly in mind the case of an 371WA employer of personal or domestic employees. A greatly simplified P.A.Y.E. procedure is provided for such cases and the employer is required to pay over the tax only once a quarter. If at the end of a particular quarter the collector is notified that no tax is deductible for the quarter, he will normally make no further inquiry of the employer for another six months. When it can reasonably be forecast that the employees will not be liable to tax at all the case is withdrawn from P.A.Y.E. and the employer need take no further action as long as the circumstances remain unchanged. I cannot think that this very simple procedure can reasonably be said to involve any waste of labour or paper or to be more than is necessary to ensure the proper collection of the tax. If the noble Viscount has in mind any case where the procedure has not been properly applied I shall be happy to have it looked into.