By Marcus Leach
Employers using fictitious names such as A N Other and Mr X on their PAYE returns are likely to cause problems to tax and benefit payments under the new Real Time Information (RTI) tax system set to be introduced from April 2013.
Taxback.com said HM Revenue & Customs has begun to highlight the issue of false names in order to encourage employers to submit cleaner data. New HMRC figures revealed that more than 500 returns claimed to employ ‘A N Other’ in 2009/10. There were also 572 people with the surname ‘X’ and 824 with the surname ‘Unknown’.
“RTI should make the PAYE system easier for all parties but it is also being used to support the introduction of Universal Credits,” said Judith Gardner, Personal Tax Senior at Taxback.com. “Unless employers submit the right data, that could affect benefit payments for some at a later date and could make it more difficult for people to reclaim overpaid tax.”
She said that in the past there has been some leeway in the system, for example, where an employer came to submit their end of year PAYE return but found an employee had left without giving the correct details.
“Employers basically act as unpaid tax collectors so it is not surprising mistakes happen, but HMRC was generally tolerant so long as tax was being paid," she continued.
“The new system depends on much cleaner data so employers will have to get it right. Using fake names is just going to raise red flags and make a PAYE enquiry more likely.
“Of course the ones who will suffer if they do not, will include those at the poorer end of the social spectrum, who tend to be more reliant on temporary, low paid jobs. This could affect their entitlement to tax and Universal credits and also make it harder to prove they have paid National Insurance contributions which might impact their state pension later.”
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