18 April 2011

HMRC have published a consultation on draft secondary legislation designed to extend collection through PAYE to all tax debts, as well as increasing the threshold for such collection to £3000.

The government has consulted twice on the principle of HMRC using the PAYE system to collect more tax debts (“coding out”), and exposed draft secondary legislation for comment alongside the Finance Bill 2009 clauses that introduced this measure. These consultations received broad support and HMRC are working towards implementing this measure from April 2012. In order to do that secondary legislation needs to be made to provide the necessary cover for HMRC to identify relevant debts to code out in Autumn 2011 and, secondly, to then begin collecting debt through the coding process in April 2012.

Increasing the coding out threshold will ensure more taxpayers’ debts can be collected using this relatively cheap and less intrusive method. It also minimises the compliance burden on the taxpayer.

Follow this link to download the consultation