§ Mr. Derek TwiggTo ask the Chancellor of the Exchequer when he will publish details of the proposed scheme for employers to pay the working families tax credit and the disabled person's tax credit through the wage packet. [57150]
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§ Dawn PrimaroloWFTC and DPTC will replace Family Credit (FC) and Disability Working Allowance (DWA) in October 1999 and will be administered by the Inland Revenue. From that date the Inland Revenue will process applications and pay the 26-week awards direct to all successful applicants. But from April 2000 employers will pay the tax credits to employees through the wage packet unless a couple chose to have them paid direct by the Revenue to the self-employed or non-earning partner.
The Inland Revenue has been consulting employer representatives on the design of the scheme, with the aim of minimising extra burdens on employers. The main features are as follows:
The Inland Revenue will notify employers of when to start paying a tax credit, and will give them time to adjust their payroll. The notification will tell the employer how much tax credit to pay and when to stop. In order to preserve the applicant's confidentiality the notification will refer only to 'tax credits'. It will not distinguish between WFTC and DPTC, nor will it list the various elements of the award.Once notified when to start payments, the employer will add the amount of the tax credit (calculated using the daily rate supplied by the Revenue) to the employee's net wages for each pay period.Employers will continue to pay the tax credits until the end of the 26-week award unless notified by the Inland Revenue to stop paying sooner. A recipient who changes jobs or leaves employment will be responsible for letting the Revenue know of these changes.When the employer is not paying the tax credit—at the beginning of an award, or where the employee has left the employer—the Revenue will be responsible for making direct payment to the recipient, thus ensuring that there is no gap in payments.Employers will set off the amounts of tax credit they pay against their PAYE and NIC liabilities. Employers whose liabilities are too small to cover the WFTC and DPTC due will be able to apply to the Revenue for funding.The Inland Revenue will be providing information and support, both before and after April 2000, to help employers meet their new obligations.