PAYE Pooling – an update

Wed, 15 Aug 2012 21:07:13 +0100

Many organisations, such as corporate groups of companies, professional partnerships, charities and public bodies, are made up of a number of separate entities. All separate entities that are employers have their own PAYE reference and are required to make payments and returns to HMRC to meet their PAYE obligations. The existing system requires certain groups maintain a number of PAYE references and this can create a significant administrative burden for many companies.

As part of plans to modernise the PAYE system, HMRC launched a consultation paper concerning a possible change which would allow groups of companies (and other entities) to be treated as a single entity for PAYE purposes known as PAYE Pooling. The closing date for responses to the consultation was 15 December 2011. HMRC have now confirmed that, having explored the various options available, no further legislative change will be introduced at this time.

As a concession, HMRC will allow employers with an informal agreement to use PAYE Pooling to continue using those arrangements until further notice. Going forward, HMRC will no longer accept any new applications to pool payrolls.