My wish list is about making life simpler for employers. All governments want to make life simpler for business: they cannot offer tax cuts, so they try to make the tax collection process as painless as possible.
I would offer the following ideas:
Realign the starting threshold for employer and employee national insurance (NI). Why is there a £2-a-week difference that complicates the payroll?
Align the earnings band for the new compulsory private pension contributions with the NI contributions band. The odd numbers chosen are another unnecessary complication.
Ensure employers that are behind with pay-as-you-earn (PAYE) returns or payments are sent prompt warnings by HM Revenue and Customs (HMRC). It is grossly unfair that it waits more than four months before sending the first warning, by which time the first late return penalty is at least £400, and annual late payment penalties can be shocking.
Simplify NI by abolishing the odd rates, such as the reduced rate for married women. People no longer need at least 10 years of NI on their record before qualifying for state pension, and any year when they earn more than the lower earnings limit now adds £5.28 a week to the pension, so the original reason behind the reduced rate has gone.
Simplify the rules for statutory sick pay and statutory maternity pay, which cause organisations endless problems.
Simplify the tax rules on termination payments. It is stressful enough making staff redundant without the added worry of HMRC possibly coming back demanding PAYE that should have been deducted but was not.
David Heaton is employee benefits specialist at Baker Tilly
