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Brexit puts roll-out of dynamic coding on hold

on Friday, 18 May 2018.

Brexit puts roll-out of dynamic coding on hold

The Association of Taxation Technicians (ATT) has welcomed HMRC’s decision to pause or stop certain projects due to the extra challenges being placed on the tax authority by Brexit.

The reprioritisation of HMRC projects was discussed at a Public Accounts Committee hearing on 30 April, and was later confirmed in an email to professional bodies. It confirmed that the rollout of Simple Assessment for income tax and real time changes to Pay As You Earn (PAYE) tax codes (dynamic coding) would be paused.

Yvette Nunn, Co-chair of ATT’s Technical Steering Group, said that it was only sensible that HMRC sought to reprioritise its work, especially as there are still problems with Simple Assessment and dynamic coding that need to be addressed.

For instance, Nunn highlighted that there have been reports of inaccuracies in the information that HMRC has used in Simple Assessments to calculate tax bills, while some employees have received incorrect tax codes where they have been paid an early bonus or have uneven earnings.

“While we welcome the pause to these projects, we strongly urge HMRC to use the extra time given to iron out the known problems with Simple Assessment and dynamic coding before they hit play on them again,” said Nunn.

In addition to these changes, HMRC confirmed it would be halting progress on digitising services for PAYE Settlement Agreements, while improvements to the tools and processes that HMRC compliance teams use to identify, work and resolve compliance risks will now be delivered over five years, instead of three. In addition, HMRC will continue to work on previously announced policies that have been given funding, including disguised remuneration and salary sacrifice arrangements.